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LTC Bullet:

Going Against the Tide…With Help

Tuesday November 9, 1999


The October 1999 issue of Life Association News, a major insurance industry trade magazine, contains an article by Chuck Jones entitled "Grave Concerns About Long-Term Care." The article cites Center for Long-Term Care Financing President Stephen Moses at length, but then closes with an interesting twist. Here's the quote from Steve followed by the climax of the article:

"Fighting Mythology

"If the number of people who need LTC Insurance but haven't bought it is high, it's mostly because of false perception, not cost, says Stephen A. Moses, president of the Center for Long-Term Care Financing, a consulting group in Seattle. 'Most Americans can afford private long-term care insurance and would buy it if well-intentioned government programs didn't anesthetize the public to this huge financial risk.'

"Moses calls this perception 'the myth of unaffordability,' and says 60 to 70 percent of Americans could pay for LTC coverage if they truly felt the need to buy it. A change in thinking has taken place within the elder-care market and public perception needs to change with it, he says.

"According to Moses, 10 years ago, 'nearly everyone assumed the government would somehow find a way to meet the long-term care financing needs of an aging population. "Who needs LTC insurance?" was the conventional wisdom. Today, almost all financial advisors strongly recommend private LTC insurance over planning for Medicaid or going broke. "Everyone needs LTC insurance" has now become the conventional wisdom.'

"'Even though the quality and reputation of private LTC insurance have improved, most people do not perceive a high level of need for the coverage,' he says. 'This reality has translated in the marketplace into the perception that private LTC insurance is good in principle, but unaffordable.'"

Here's the twist:

Because of the intercession of an excellent long-term care insurance agent who explained the real risk of long-term care and the true need of private insurance, the couple featured in this article overcame the conventional wisdom that such coverage is too expensive and they purchased adequate protection. Quoting the article:

"Despite the sticker shock for their joint policy, [the couple] realize the coverage is not only necessary, but brings them peace of mind and some control over their future. And they have their agent, Ken Norris, to thank.

"'It was Ken's deal…He was clear and factual. He obviously likes what he's doing, and what he was doing was helping us…Ken showed us long-term care insurance didn't have to be too expensive if we tailored the policy the right way…He made us see that the coverage was more like an aid to the situation, paying a large portion of the cost while leaving us to copay the rest. Sort of a supplement to our other retirement assets.'"

This vignette is a perfect example of why private long-term care insurance is a product that must be sold, not just bought. When a thoughtful, knowledgeable, and persuasive long-term care insurance specialist properly lays out the risks, rewards and trade-offs in long-term care financing, the public is well-served.