LTC Bullet: LTCI’s Responsibilities

Friday, April 13, 2018


LTC Comment: Today’s guest author, LTCI specialist Gene Cutler, asks what responsibilities LTC insurance producers, distributors and carriers have to current and future clients, after the ***news.***

*** TODAY'S LTC BULLET is sponsored by Claude Thau, whose revolutionary “Range of Exposure” tool projects clients’ likelihood (joint for a couple) of spending $100,000; $250K; $500K or over $1,000,000 on LTC, based on their personal characteristics.  Claude offers ways to educate clients and reduce “Ping-Pong” in the LTCi sales process. Help clients compare Combo vs. Stand-Alone LTCi easily and make informed final LTCi decisions in 15-20 minutes!  Change work-site LTCi from a series of proposal deliveries to a single interactive consultation!  Claude is the lead author of Milliman’s annual Broker World LTCi Survey & a past Chair of the Center for Long-Term Care Financing. For questions or references, reach Claude at 913-403-5824 or ***

***LTC CLIPPINGS: Following are a couple of our recent “LTC Clippings.” To subscribe and receive the clippings by email once or twice per day, contact Damon at 206-283-7036 or ***

4/11/2018, “Is There Such A Thing As Normal Aging?,” by Bruce Horowitz, Kaiser Health News

Quote: “Drawing on their decades of practice along with the latest medical data, Gill and three geriatric experts agreed to help identify examples of what are often — but not always – considered to be signposts of normal aging for folks who practice good health habits and get recommended preventive care.

LTC Comment: If you’re older, read this article to see how you’re doing in comparison to others. If you’re younger, find out what you have to look forward to!


4/10/2018, “How Growing Inequality Is Altering The Long-Term Care Policy Battlefield, While Tightening The Financing Knot,” by Karl Polzer, Health Affairs Blog

Quote: “For many years, long-term care (LTC) policy makers have tended to fall into two warring camps: those favoring expanded social insurance, and those wanting tighter Medicaid eligibility criteria to incentivize people to plan for and buy LTC insurance. Both sides have warned of looming financial catastrophe as the Baby Boomers move into retirement and more than double the population needing care. Disagreement has resulted in a policy stalemate. The vanguard of the Boomer generation is less than 10 years away from beginning to drive up demand for LTC, and the country is unprepared to pay for it. It’s time that the policymakers stepped out of the old trenches. The war they’ve been fighting is largely obsolete.

LTC Comment: Congratulations to longtime friend and fellow LTC policy plodder Karl Polzer for publication of this piece on the Health Affairs Blog. Read it for sure, but keep in mind that as pessimistic as its message is, the reality is much bleaker. None of the interventions he mentions would mitigate the impending LTC financing crisis significantly. Such proposals address only symptoms, not the cause, i.e. easy access to Medicaid LTC benefits after the insurable event has already occurred. I address that cause and propose a realistic solution in How to Fix Long-Term Care Financing, published last July by the Foundation for Government Accountability and the Center for Long-Term Care Reform. Read it for balance.



LTC Comment: I’ve known Gene Cutler and followed his career for over 20 years. He is one of the top LTCI producers in the country. When someone like Gene becomes concerned about how his industry is treating customers, he bears hearing. So here’s what Mr. Cutler wants to say to you and ask. Contact him directly to reply at and copy to keep us in the loop as we’re interested too.


“What are LTCI’s Responsibilities to Customers?”
Gene Cutler

I have been a long term care specialist exclusively since 1994. I’ve placed well over $7,000,000 of business with the major carriers, some of which are still writing LTCI and some no longer accepting new business.

I frequently hear from clients I’ve written well over 20 years ago to update me. They say they’ve “become that person you were there to introduce me to … the one I didn’t want to meet.” They reassure me that the reasons for taking out this coverage have become clearer and more meaningful, validating not only their worries at the time but also my efforts to awaken them to long-term care risk.

We gave good advice back then. We should be there again as industry evolution and adjustments require our clients once more to make difficult decisions. They need our guidance and recommendations, which have proven so right.

I’m looking for suggestions from those of us who have made it our mission to help clients confront the unavoidable and disconcerting challenges that long-term care planning resolves. Specifically, I seek reassurance that when care needs arise, long-term care providers will be there as promised.

As our industry has evolved and companies have stopped accepting new applicants, our existing clients need to feel confident they will receive the benefits their policies promise. This is true now more than ever, as necessary rate adjustments have been approved and implemented.

The challenges for policyholders arise when they receive notifications pronouncing 50, 65, 80 percent + increases--unexpected and unwelcome--typically stating an increase on page 1 followed by multiple pages rationalizing why and offering options--scripted by attorneys and actuaries--that are too often more confusing than clarifying. In this situation, customer support is critically needed to clarify and advise, but carriers have downsized or outsourced channels, ultimately causing additional frustrations.

As writing/servicing agents, we are all motivated, willing and able to console, explain and advise clients if and when we are notified in advance and provided with the options. Some carriers do notify us ... some don’t. If a policyholder can’t get through to the carrier and/or frustration leads to a potential lapse, the agent should be there to help the client maintain the original objectives of the plan with appropriate modifications. But that can happen only as long as the carrier notifies the agent of an impending lapse.

Long-term care insurance carriers have declined in number from over 100 at one time down to perhaps 15 now. Some were up to the task of guiding their insureds through these difficulties initially upon departing the business, while many have clearly reduced policyholder services. Some never intended to notify the agent of impending lapses, prompting if not encouraging higher lapse rates.

Is that part of their business model? Where are the State Departments of Insurance and the regulators? NAIC? Tax incentives and LTC Partnerships were intended to emphasize financial concerns and transfer this risk into the private sector, yet a blind eye to this unfortunate behavior will bring it right back to states and the federal government.

I’d like to believe that the initial intentions of both producers and carriers when we encouraged these transactions were and remain honorable and supported as policyholders approach potential claims. I’d like to feel that companies still in the game maintain the commitment they advertise in marketing promotions, and that they will enable us, as the points of contact for the industry with their insureds, to support policyholders’ rights with confidence and sincerity. Our clients deserve no less.

Major carriers still want us to promote other products on their behalf, such as Life/Health/Annuities, etc., as we once did their LTCI products. They emphasize their customer support, as they once did for LTCI, should problems arise or claims occur. Are we as comfortable and confident as we once were that we will be able to give that support?

What can we do?

Think about calls you’ve handled recently, or wished you could have handled better. Express your concerns through your wholesalers. Make recommendations to your clients based on your confidence and experience with the carrier.

I’ve heard it said many times that LTCI specialists have a passion about their work that other specialists don’t exhibit. Our passion arises from the satisfaction of listening to and then addressing a client’s worst fears. It is justified and reinforced as years go by. In the end, those clients and their families understand and express appreciation for the value of our advice. That instills the confidence in each one of us to continue.

It would be nice to believe our carriers feel the same.

Gene Cutler, Master Agent, ACSIA Partners,


LTC Comment: Gene Cutler isn’t the only source of LTCI industry self-analysis and self-criticism. We’ve noticed a lot of healthy introspection among thought leaders in the business lately. Another example is Ron Hagelman’s excellent recent columns in Broker World. We highlighted one of them in LTC Bullet: The Medicaid Prevention Business. Here’s an excerpt from another, titled “Monday Morning Quarterback” in the magazine’s March 2018 issue.

All our futures in long term care insurance must now be guided not by our past success of a mere 8 million policy owners after 20 years, but by the 54 million we failed to encourage to “do the right thing.” The truth is we have been looking at this from the wrong end of the telescope. It was not how big and simple that was needed—it was how small and customized to the actual circumstance and dimensions of the most likely claim experience! The corollary truth is that for too long our goal has been to replace as much risk as possible with insurance. The affluent have always done just that and I see no reason for them to stop. Our goal should have been how many can we save from the intrinsic inadequacies of government dependence. How little is needed to maintain the freedom of choice that comes from remaining a private pay patient?

I wish I could say we’re seeing the same kind of modesty and self-review among the advocates of government financing. After all, they created the mess we’re in with inadequate retirement, health care and long-term care funding. But they only advocate more entitlement spending, which further anesthetizes the public to financial risk and loads the country with unprecedented debt. Doing the same thing and expecting a different result is, in a word, nuts.