The Long Term Care Insurance Outlook

Broadcast Retirement Network's Jeffrey Snyder discusses the changing long term care insurance outlook and how insurers are meeting the increasing demand with OneAmerica Financial's Jeff Levin.

Jeffrey Snyder, Broadcast Retirement Network

Well, joining me now, Jeff Levin is with One America Financial. Jeff, so great to see you. Thanks for joining us this morning.

Jeff Levin, OneAmerica Financial

Absolutely, Jeff, thanks for this opportunity. Excited to be here.

Jeffrey Snyder, Broadcast Retirement Network

Yeah, very exciting. And it almost feels like deja vu, Jeff. The audience is probably like, what does that mean?

Anyway, we'll get to that later, audience. I wanna start with a baseline question. Let's talk about the long-term care marketplace.

I would assume based on trending demographics, the marketplace is really growing and demand is growing for these types of products.

Jeff Levin, OneAmerica Financial

It is. You know, there's this conversation right now, Jeff, about this next decade, this next 10 years is probably gonna be an inflection point. I'm gonna give you a couple of numbers to support that.

This year, the baby boomers start turning age 80. Last year, the Gen X that I'm a part of started turning age 60. And there's another statistic out there that I wrote down.

54% of those over the age of 40 currently have a parent that is older than 65 and a child that is younger than 18. And so we're at this point where if you thought the marketplace, the need for long-term care was either stagnant or on the downside, it's just the opposite. We are in for some turbulent times, as they say.

Jeffrey Snyder, Broadcast Retirement Network

Yeah, it seems like, yeah, I think we have four or five generations working right now for the first time, I think in at least modern history, American history, that's amazing. Are consumers educated enough about the marketplace? Because clearly firms like yours have been creating products, newer products.

So are consumers aware of what these products are and what they potentially cover?

Jeff Levin, OneAmerica Financial

It's a great question. You know, we've been doing this since 1989. I think consumers overall are aware that there are solutions in the marketplace, but I don't think they're as educated as they could be.

I won't say as they need to be, but as they could be around all the different types of offerings that are out there. Because I truly believe with the number of carriers that are in this space today, depending on your age, depending on your health, depending on your income, there's most likely a solution out there for almost everyone in the marketplace. Unless you're in this position of either already needing care, and there's actually an opportunity out there for someone who's already needing care, or if your health is already challenged, it limits it.

But I think there's solutions out there today. And to your point, I think more education would be a great thing.

Jeffrey Snyder, Broadcast Retirement Network

In terms of buying these types of products, do people typically buy them, they go to like a website, like One America Financial's website and buy them themselves? Or do they buy them through an intermediary, like a broker, an advisor, a financial planner?

Jeff Levin, OneAmerica Financial

Yeah, so One America Financial, we do not have a direct consumer model. There may be one or two carriers out there, but I'm really not sure, just at least off the top of my head, for the most part, as you said, they go to a professional, whether it's a financial advisor or an insurance professional, an intermediary, somebody that can help them understand the nuances of these products and make sure that what they're purchasing is suitable for what their needs are. And the way I kind of look at this is, long-term care is a little bit more of a complex product.

For a simple term, life insurance product, I think if you're savvy enough, you can do that on a direct to consumer site. But I think when you're looking at long-term care and the myriad of solutions out there, and certainly depending on the complexity that you get into, I think working with professionals is best.

Jeffrey Snyder, Broadcast Retirement Network

And we ask a lot of our intermediaries, I mean, they have to, they're not only doing financial, or holistic financial planning, you know, they're selling, in some cases, investments, mutual funds, collective investment trusts, life insurance products. How do they stay educated? I mean, I'm just, as a reformed advisor, I know it was very difficult to know all the different carriers in the retirement space.

That's a lot of information that people have to go through. How do they stay abreast in order to advise their client appropriately?

Jeff Levin, OneAmerica Financial

Yeah, I mean, long-term care planning is just one aspect of either being an insurance professional or financial advisor, like you said, certainly an important of a holistic plan, but life insurance, and trusts, and investments, and there is a lot. And what I would say is to any insurance professional or any financial professional, you don't need to be an expert in this field. Really, what you need to be most comfortable with is discussing the concept of long-term care and bringing that conversation up, you know, with your client.

Have you looked at long-term care planning or the real simple question is, what is your plan for long-term care? And most people will say, I either have one or I don't, but this is where the professional can really rely on the insurance carrier. Almost every insurance carrier has some type of a support team, whether it's an external wholesaling team, maybe an external and an internal, but there are subject matter experts out there at the carrier that can help the professional be the person that helps bring the solutions to the table.

They don't need to know everything about it.

Jeffrey Snyder, Broadcast Retirement Network

Well, yeah, I mean, you just can't, it's not possible to be an expert on every aspect of the products that you cover. You have to know where to go to get the information. Let me, you know, I'm an old school benchmarker, RFP guy.

How do you, all these products are different. I mean, they're unique in that they use insurance, but there's different ways that they have different provisions. How do you, if you're a carrier, an intermediary, how do you benchmark these products?

I mean, it's not like you just put it on a spreadsheet and say, pick A, B, C, or D. I mean, there's a lot that goes into this.

Jeff Levin, OneAmerica Financial

There is, and I think it's really up to the individual client. The client and their finances, their needs, maybe even their history, health history is gonna help dictate some of that. There are programs today, we call it standalone long-term care insurance.

It's, if you consider like a term product, you buy a certain amount and you continue to pay premiums on that until you need it. There are hybrid policies that combine life insurance and long-term care or annuities and long-term care. That's what we do.

That's a type of coverage where even if you never need long-term care, there's still a benefit in the form of a life insurance death benefit that would go to the estate or the annuity benefit. It's really a matter of what the person is trying to protect, how long they need coverage for, and really where are the assets coming from to help the funds? Is it non-qualified dollars?

Is it qualified dollars? And so to our earlier point, there are solutions out there for everybody. I think with the help of a carrier, they can give you the right questions to ask.

And look, I truly believe, and maybe it's too altruistic, I truly believe that if you're in this space, you're looking to make sure people have the right solution. And I know that the team that I lead, look, if we know there's a carrier that has a better solution than what we can offer, whether it's price or coverage, we will point them in that right direction. It's about having a conversation and getting protection in place.

It's almost like the solution is secondary.

Jeffrey Snyder, Broadcast Retirement Network

And I agree with you. I mean, I think if you, I come from a world where if you treat your client right, your client will treat you right, right? And that's, it benefits and you pay it forward.

You know, I was gonna ask you about the regulatory and the policy front. I know that's not necessarily what you do on a day-to-day basis, but there's a lot going on at the state and federal level, I think, to address these demographic shifts that are happening. And by the way, they're not, Jeff, they're not unique to the United States.

I mean, it's happening in China, Europe, everywhere around the world, people are, we have primarily an aging population. So are members of Congress, are the federal regulators, the state regulators, are they looking at how to maybe build a better mousetrap for lack of a better term?

Jeff Levin, OneAmerica Financial

Yeah, it's probably happening at all levels of government. You know, the state of Washington a few years ago with the Washington CARES Act was really the first to implement a holistic plan for their constituents. There's other states, there's probably 12 to 15 states at any one time that are looking at some type of a solution or considering or modeling California, New York, others.

And then you have at the federal government level, you do have individuals that are really driving the message. Congressman Suozzi is very big in long-term care protection and has a number of, I will say, conversations going forward. You look at some of the states today, above the line tax deductions, if you have insurance protections.

And so I think there is this realization that the federal government and state governments at the, certainly at the Medicaid level, this isn't something that people can handle or states can handle or the government can handle long-term. And so there's always discussion going on. I don't know that we have found that point of an answer yet.

Jeffrey Snyder, Broadcast Retirement Network

Yeah, well, I think it's a work in progress. Clearly the demographics are shifted, have shifted. Last question for you, Jeff, for all of the Gen Alphas out there, that's the kind of the newer generation, I'm a little, I'm a Gen X-er like you.

So I think they're now called Gen Alphas, but aren't we all, I mean, if they're like poo-pooing this and saying, oh, this doesn't really fly to me, aren't we all gonna be recipients of some type of long-term care or caregiving? Or aren't we all at some point in our lives gonna be caregivers?

Jeff Levin, OneAmerica Financial

Yeah, I wish I could remember the exact wording because it's very powerful, but Rosalind Carter had this quote that said, at some point in our lives, we're either gonna be care recipients, caregivers, or care providers. Something, I'm getting the exact words not right, but to your point, look, we're either gonna provide care, we're gonna receive care, or at some point we may need care. And so, yes, this is a problem that's gonna be faced by everybody.

And one of the things that I would encourage people to do is just, again, simply have the conversation. We spend so much time talking about accruing assets under management for retirement and what that may look like. But if we don't take this additional step, this protection step to protect those assets, then we've saved all this money and we haven't planned for the unforeseen or the unknown event of long-term care.

And that can quickly wipe out all the assets that people have saved.

Jeffrey Snyder, Broadcast Retirement Network

Yeah, and look, the people that are being born today are probably gonna live into their, in triple digits, I read it. So at some point you're gonna need this. Hopefully we'll have even better products than we do today.

Jeff, we're gonna have to leave it there. Great to see you. Thanks for joining us.

And we look forward to having you back on the program again very soon, sir.

Jeff Levin, OneAmerica Financial

Really appreciate it. Thanks, Jeff, very much. Thanks for the time.