Eric Henderson has been working to protect Americans from longevity and health risk for years.
Henderson, senior vice president of the annuity and life businesses at Nationwide Mutual Insurance Company, came to New York on Monday to try to draw attention to Americans’ unmet long-term care (LTC) planning needs.
Nationwide’s Nationwide Retirement Institute is doing its part this week by releasing its sixth annual batch of LTC awareness survey data. The institute hired Harris Institute to poll 1,214 U.S. adults ages 50 and older, and a separate sample of 508 caregivers ages 50 and older.
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One survey finding: Planning ahead for the need for care helps.
“When you don’t plan for it, that makes it really tough to deal with it,” Henderson said in an interview.
When a couple that has failed to plan is caring for an older parent, “it puts stress on their marriage,” Henderson said. “It puts stress on their finances.”
Henderson said helping people plan for LTC needs, and caregiving responsibilities, is an example of how financial professionals can pursue what Nationwide calls their “noble purpose”: putting clients in a better position.
Here are five more ideas about the nuts and bolts of pursuing the noble LTC planning purpose, drawn from the interview with Eric Henderson, and from a summary of Nationwide’s survey findings.
(Image: Andre J. Spidjass/Thinkstock)
1. Consumers may know a more, but gaps remain.
Nationwide found, for example, that the participants in the latest survey knew one important thing about LTC risk: 85% understood that Medicare does not pay for LTC services.
The participants also showed some awareness of their knowledge gaps: 67% said they wished they understood Medicare better. Only 27% were cocky enough to say they were confident about their ability to pay for LTC expenses.
But 55% of the participants said they had not discussed LTC costs with anyone.
2. Many financial professionals still have trouble volunteering information about LTC risk.
For anyone, talking about LTC risk “is a very emotional discussion,” Henderson said.
Most financial professionals now know they should address the topic, but, especially when they have never sold stand-alone long-term care insurance (LTCI), “they’re not comfortable having that conversation,” Henderson said.
Nationwide has developed an infographic and other materials to help financial professionals explain the risk to clients.
Nationwide has also added a health care assessment.
Going over the assessment results with a client can be a relatively easy way for a financial professional to ease into a conversation about LTC risk, Henderson said.
3. Nationwide now focuses on life insurance-LTC combination products.
Nationwide has designed its life-LTC hybrids products for consumers who need life insurance and would also like some protection against LTC risk.
The company sells life insurance with an LTC rider to consumers who are mainly interested in the death benefit and think of LTC benefits as a secondary feature. Those types of riders operate by accelerating payment of a portion of the policy death benefit in advance.
The company also sells linked-benefit products. Those products offer an additional pool of LTC benefits cash beyond the pool of cash available from the policy death benefit.
The linked=benefit products appeal to consumers who are more interested in protecting themselves against LTC risk than in a death benefit, but who still want to get some kind of value out of the policy if they avoid ever using LTC services, Henderson said.
Years ago, one knock against life- or annuity-based LTC hybrids was that they were mostly single-premium products. Now, Henderson said, multi-year payment options are available.
4. Nationwide is getting more interested in navigator services.
In the past, another knock against using life-based or annuity-based products to pay for LTC services was that the issuers tended to offer weaker care coordination and policyholder support services than issuers of stand-alone LTCI issuers did.
The developers of the Affordable Care Act public exchange system put the need for patient navigation services in the spotlight. In spite of the problems the ACA public exchange system has been having, the idea that consumers need health care system navigation help seems to be growing in popularity.
Nationwide began offering a “health care concierge” service package to its own employees a few years ago. The company decided to try offering a similar package of services to 25,000 of its variable annuity contract holders this summer.
The concierge service is, in effect, a health care and LTC services navigator program: It helps consumers understand what options are available and how to get care. In some cases, program counselors can set up appointments or help with billing problems.
Nationwide hopes to make similar concierge services available to users of its life-based LTC planning products, Henderson said.
5. Nationwide could add annuity hybrids.
Some LTC planners believe that tax rules make life products a better chassis than annuity products for LTC benefits options.
Nationwide believes that the real question is whether the client needs life insurance and wants to build LTC protection onto that, or whether the client needs insured income and wants to snap LTC protection onto the vehicle for providing the insured income, Henderson said.
Nationwide is now looking to add annuity-LTC hybrids to its product shelves, Henderson said.
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