Amid the onslaught of media coverage respecting Glenn Neasham’s conviction for selling an annuity to a 83-year-old senior diagnosed with Altzheimer’s Disease, many of our readers are asking how they can guard against a similar fate. One place to look for guidance, clearly, is your annuity carrier.
Unfortunately, many annuity providers don’t have well-developed programs to aid agents in dealing with clients or prospects suspected of being cognitively impaired and, thus, not wholly competent to consummate a product sale. This is a significant oversight for an industry that has devoted much time and resources to helping producers determine the suitability of an annuity given the client’s age, financial resources, life goals, risk tolerance and other criteria.
Knowing how to custom-fit a product to the client profile is all well and good. But if the prospect doesn’t seem to fully understand or remember what the agent discussed during a product presentation, then the insurer in question needs to be able to invoke procedures to decide whether or not the producer should proceed with the sale.
For agents, the issue is likely to grow more urgent in coming years, as many of the estimated 13,000 of 78 million baby boomers who are daily turning age 65 have some form of dementia. Topping the list: Altzheimer’s Disease, which is the 6th leading cause of death in the U.S. and the 5th leading cause of death for those aged 65 and older.
According to a March 2012 report of the Altzheimer’s Association, 5.4 million Americans are now living with Alzheimer’s—5.2 million aged 65 and over, but also 200,000 under the age of 65. By 2050, up to 16 million Americans will have the disease. Of Americans aged 65 and over, 1 in 8 has Alzheimer’s. And nearly half of people aged 85 and older have the disease.
These numbers add up to a minefield of potential lawsuits. Thus, producers like Neasham need to have a plan in place to recognize early warning signs of mental disease; and, once identified, to take their concerns up the chain of the command so as to minimize the possibility of civil or criminal actions after the sale.
One insurer with a program to help agents address mental cases is Prudential Financial. John Gordon, vice president of business quality for the Newark, N.J.-based company, says that Prudential’s Health and Wellness group spearheaded a training initiative in 2009 for its career agent field force, as well for its back-office/operations personnel.