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Life Health > Health Insurance > Health Insurance

LTCI Watch: What's Broken?

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Life insurance underwriters are the Cassandras of the business world.

The gods have wrapped them in a thick blanket of “insurance is boring” to keep people from grasping what their projections mean.

Long-term care insurance (LTCI) underwriters and claims administrators live on an even more rarefied plane. They aren’t just frighteningly good clairvoyants; like people with homes in Brevard County, Fla., they already live in the future.

The future is a place with a few pretty rocket launches, many overgrown launch pads, and a lot of gray hair.

Members of the LTCI community have also discovered that what they thought would be true is true, and the future is a place where huge numbers of people, benefit plans, etc. have not bothered to make serious efforts to save or otherwise prepare for the Aging of the Boomers, reach the Time of the Change, and look at to the sky like innocent baby birds, chirping, ” Feed me!”

The LTCI community has gotten to this point and discovered it was a little too optimistic about claims, a little too pessimistic about policyholders’ passionate tendency to hang on too policies, and a little naive about how the Federal Reserve Board would go about balancing the interests’ of savers, lenders and long-term investors, on the one side, and the interests of panicked debtors on the other, when meddling with interest rates.

But the LTCI community knew roughly what the future would look like and made a serious Statutory Accounting Principles attempt to prepare for it.

Meanwhile, the rest of us squandered the money we should have been investing in infrastructure for handling the boomer shift on McMansions and iPhone games.

Supposedly, the app makers are titans of digital commerce and, from the perspective of Wall Street, the LTC insurers are mole people.

Perhaps everything will look different when the rest of us catch up with the LTCI people and understand what the future looks like.


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