Quality And Security
Undoubtedly, financial strength and longevity are key traits of the kind of quality advisors and their clients should seek. But is that easier or harder to find nowadays? Has the shake-up razed the unreliable purveyors, leaving only the best standing-or has it cast an indelible shadow upon the entire industry?
"Some of the bad news that's making the headlines is not happening throughout the industry," affirms Steven Sperka, a vice president at the Milwaukee-based Northwestern Mutual, a leading LTC provider that reports brisk sales growth and unchanging prices. "The sky is not falling everywhere."
Advisors who wait until the dust settles will probably be sorry. "We know that 70% of people over age 60 will require some kind of LTC services in their lifetime," says Sperka, "and with the aging population, this is becoming a bigger and bigger risk."
That risk is twofold. LTC insurance is intended to protect assets in the event of a sustained, expensive, life-shattering event, of course. But it also protects clients' independence and very quality of life, enabling policyholders to preserve a level of dignity and autonomy after becoming no longer able to perform two or more "activities of daily living," such as bathing, dressing or feeding themselves, emphasizes Sperka.
"Smart advisors are realizing they had better start to understand this because it's on clients' minds," he says. "They want their financial advisors to bring this up and ask the right questions-and if the advisors don't, they're missing a huge opportunity."
Part of that understanding, however, is knowing your limits. "This is a very specialized field," says Sperka. "If you're not sufficiently knowledgeable yourself, you should find people who are."
The Foreseeable Future
For LTC providers, the pressures may be far from over. But, says Gordon, the financial advisor in Illinois, "most carriers have a better handle now on pricing their products. They've gone through the learning curve, passed crawling and walking, and are ready to run."
Who makes it to the finish line, though-and in what order and why-remains to be seen. "I don't think the larger providers will go broke, but the pool of providers will surely shrink," says Walker, in Georgia. "Only the strongest will survive."