Monday, April 1, 2019

No. 306: Long-Term Care Insurance and the NAIFA Limited and Extended Care Planning Center

Recently I learned of the Limited and Extended Care Planning (LECP) Center created by the National Association of Insurance and Financial Advisors (NAIFA). Here is the December 2018 announcement that brought the LECP Center to my attention:
With over 10K people turning 65 every day, it's essential to know how to talk to your clients about plans for themselves, their parents and their family members. That's why we partnered with the industry's biggest players to create the Limited and Extended Care Planning (LECP) Center. It's the ultimate resource to help meet all of your clients' long-term planning needs. You will have unlimited access to: techniques you can use immediately to close more business and grow your practice, customized advice and solutions from the top leaders in the LTC space, and promotional materials you can use to easily show your clients the options for funding care whether for a limited, extended or long-term period. [Underlinings in original.]
The insurance company partners in the LECP Center are Genworth, Nationwide, New York Life, and Thrivent. The other partners are Advanced Resources Marketing, Certification in Long-Term Care, Intercompany Long Term Care Insurance Conference Association, LTCI Partners, and Target Insurance Services, Inc.

My Initial Inquiry to NAIFA
On December 20, 2018, I sent an email to Carroll Golden, executive director of the LECP Center at NAIFA headquarters. I said I have written extensively about long-term care (LTC) insurance. For example, I attached an article entitled "Shortcomings of Private Insurance in Financing Long-Term Care," which appeared in the July 2008 issue of The Insurance Forum. I also attached a copy of chapter 18 entitled "Long-Term Care Insurance" from my 2015 book, The Insurance Forum: A Memoir. I asked what the LECP Center recommends that agents say to prospective buyers of LTC insurance with regard to several problems that confront buyers and owners of LTC insurance policies, such as large future premium increases.

The NAIFA Response
Golden responded three hours later. She did not mention my attachments or answer my questions. Here is what she said:
Overall, the Center does not recommend what agents or advisors should say to prospective buyers of LTC insurance, or any insurances or options that are included on the Center. The mission of the Center is to maximize professional and consumer awareness and the distribution of limited and extended care solutions through thought leadership, educational resources, research, networking, and advocacy. Using the power of a virtual, private online community, the Center brings solution and service providers, producers and thought leaders together to deliver trends, training, expert advice, communications, networking, and advocacy. The Center posts information, but does not recommend any one option over another.
Given the various informational categories, Education, Designations, Expert Advice (divided into three areas—Planning in Advance, Products and Services, and Point of Need), Networking and Community, Research and Trends, and Advocacy, the Center serves more as a repository than an advice center. We would like to encourage more people and professionals to include current and future care needs in their planning. We recognize that health care can be costly, not only financially but also emotionally. The Center hopes to provide information that starts more conversations and research into limited and extended care planning needs.
My Follow-Up Questions
Three hours later I sent Golden some follow-up questions. First, I asked whether she had read my July 2008 article and the chapter from my memoir, and if so, what thoughts she had on them. Second, regarding her statement that the Center posts information, I asked whether the Center posts information about the problems alluded to in my previous email. Third, to the extent the Center does not post information about those problems, I asked why the Center refrains from doing so, and whether the Center is saying there is no need for agents and consumers to know anything about those problems. She did not reply. On January 3, 2019, I asked the questions again; she did not reply.

My Survey
On March 12, 2019, I directed similar questions not only to NAIFA but also to the other partners who created the LECP Center. I asked them to acknowledge receipt promptly, and designated March 26 as the final date for a substantive response. The survey, which consisted of a cover memorandum and the July 2008 Forum article, is in the complimentary package offered at the end of this post.

In the cover memorandum I inquired about their objective in helping organize the LECP Center, and about how much they had contributed to help organize the Center. Also, because the Center appears to perform an educational function, I asked for their comments on what the Center will provide concerning seven problems that confront buyers and owners of LTC insurance policies: (1) large future premium increases, (2) future offers of large decreases in benefits, (3) endless correspondence when consumers file claims for benefits, (4) departures of companies from the LTC insurance business, (5) transfers of LTC insurance policies from one insurance company to another, (6) failures of LTC insurance companies, and (7) LTC insurance companies taken over by companies in foreign countries.

Two of the partners to whom I sent the survey acknowledged receipt and implied they would respond substantively. One of those two later said: "The team discussed internally and will decline to participate this time. Thanks again for the outreach." From the other one I received nothing further. A spokesperson for another of the partners said: "Following up on your email to us regarding NAIFA's LECP Center. Thanks for your interest but we're going to pass on this opportunity for now." None of the other partners acknowledged receipt, and I received nothing from them.

General Observations
For many years I have said that the problem of financing the long-term care exposure violates important insurance principles, that the problem therefore cannot be solved through the mechanism of private insurance, and that many who buy LTC insurance will be disappointed. A detailed discussion of the subject is in my article in the July 2008 issue of the Forum.

My conclusion from the unsuccessful survey is that the partners who created the LECP Center have no interest in educating prospective buyers of LTC insurance about the problems they will face if they buy LTC insurance. I think the failure of the partners to confront those important problems and disclose them to prospective buyers will lead to the disappearance of the LTC insurance business.

Available Material
I am offering a 7-page complimentary package consisting of the March 12 memorandum to the partners who founded the LECP Center (2 pages) and the July 2008 Forum article (5 pages). Email and ask for the April 2019 package relating to NAIFA's LECP Center.