Long-term care could be most important policy you write

SAN ANTONIO --  Thanks to "the most important" policy he sold in his long career, DJ Mormile is able to write a check for $14,400 every month.

"It was a policy on my parents," said Mormile, regional sales director for OneAmerica. "My dad's on claim. While he was getting 10 hours of care day, we had the unexpected happen: My dad fell."

The fall injured Mormile's mother in the process, and "now I've got both parents now receiving care," he said.

"While that's a sad story, and it's tough, it's been made a whole lot easier because I'm not having to pull that money out of my parent's account," Mormile said. "I'm not having to pull the money out of my account."

Mormile spoke as part of a session Tuesday at the Life and Annuity Conference, sponsored by LIMRA, LOMA, SOA and ACLI. Speakers, including Patrick Scanlon, Global Atlantic consultant, and Michael Bishoff, regional marketing director at Lincoln Financial Distributors, talked about using annuity products to fund long-term care needs.

"Everybody has some type of situation," Scanlon said. "You know, a lot of times it's not necessarily the most positive because nobody likes getting older, but the alternative is even worse. So at the end of the day, the longer you live, the greater the risk."

Many Americans haven't taken any steps to prepare long-term care plans despite being keenly aware of its importance, according to the results of a recent Transamerica study.

Nine out of ten (91%) of Americans believe that long-term care planning is crucial, but just 45% have actually given thought to planning for their long-term care needs, Transamerica's Extended Care Report found.

Overcoming objections

One of the biggest challenges is overcoming ingrained perceptions, the panel agreed. Almost nobody sees themselves infirmed and relying on help for day-to-day activities. Mormile's father confidently told him the LTC policy he would get was "for your mother."

In reality, long-term care has come a long ways from the days when many policies were sold as "nursing home insurance," the panel noted. Policies now pay for home health care, and the ability to remain at home should be a key selling point, Bishoff said.

"I've never met a client and said, 'Hey, Mr. Smith, if you have a long-term care event, what would you like to do?' Mr. Smith has never said to me, 'Hey, I want my kid to sell my house to put me in a nursing home,'" Bishoff said.

"From an advisor standpoint it's, 'Hey, I got an idea of keeping you in your home as long as possible.'" he explained. "That right there is going to get more people having the conversation because so many people are pigeonholed into thinking, 'I've got to be in a nursing home.'"

Where there were once dozens of insurers selling LTC insurance, now there are just a handful. Actuarial assumptions proved faulty and many of those policies sold in the 1990s and early 2000s are unsound. Carriers such as Genworth are seeking repeated price hikes to stabilize their books.

But LTC insurance is making a comeback, driven by public policy debates. In July 2023, Washington became the first state to introduce a government-mandated LTC insurance program meant to address this issue. More states are expected to follow.

"We would love to have more [insurers] in it because the more people that are in it brings more people like ourselves out in the field talking to advisors and consumers," Mormile said.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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