Long-Term Care Insurance Makes Good Financial Sense
Tim Landry started in the insurance business in 1969 with Crown Life and is now a living benefits consultant. “I have no interest in retirement. I say to a lot of people that I’ll retire three weeks after I die. I’m blessed to like what I do,” he says.
He has now started QTRSolutions.com, an online and independent living benefits insurance business based in Montreal with broker David Engel. Of all the living benefits products out there, from critical illness to disability insurance, Landry’s true passion is long-term care. “I’ll do anything I can to increase the awareness, acceptance and sales of this product,” he says.
Ever since he watched his brother go through six hip replacements following a near-fatal high-speed car accident and never be able to walk without his canes, Landry says he has become somewhat of a long-term care evangelist.
“I used to be a technician. I understand how products work backwards and forwards, but my brother’s accident helped me learn that being a technician doesn’t help me,” he says. “It was a head-on collision at a combined speed of 120 mph. My brother survived the accident, but he had a very close meeting with the steering wheel. That’s not the worst of it, as the blood transfusions that saved his life also gave him hepatitis C. This is why I went from being a technician and to being an evangelist.”
Landry was introduced to long-term care at a broker conference where Phyllis Shelton — a famous long-term care trainer and consultant — was speaking. But what really got his attention was a situation with his upstairs neighbour. He explains: “We had a 91-year-old woman living above us and she had some form of dementia. Her daughter lives two blocks away and the mother would call her often. And if the daughter wasn’t at her mother’s home in 30 seconds, the mother would call again, as she had no concept of time. I remember the daughter coming in and screaming at her mother, ‘Mom, I wish you would die!’ She became very overwhelmed, as she was taking care of her mother and her son, who has advanced MS, at the same time.”
This is why Landry actually considers himself lucky that both his parents died young, because he didn’t have the problems that come with having to give care to his parents, but he has seen it time and time again. This is why long-term care insurance is so important.
“People aren’t prepared, or even know they have to prepare, to pay for their own long-term care. Everyone believes the government will pay — give me a break!” Landry explains.
Landry says we are about to hit three taxpayers per retiree, so there’s no way that people can rely on the government.
“Ask yourself, if you need care, do you want to be a customer or do you want to be a patient? I’m sorry, but I don’t want to be a patient.”
We’re living longer, so dementia is bound to explode, which is why Landry says we all will need care and we’ll absolutely have to be able to afford it. Even if you happen to be extremely wealthy, he’ll tell you that it still makes better financial sense to use the funds provided to you by an insurance company rather than your own.
“A lot of wealthy people buy life insurance because it makes more sense to use other people’s money rather than their own.” says Landry. Not only that, but he’ll tell you we’re on the cusp of an eldercare crisis, where family members will no longer be available full-time to take care of their aging parents.
“Men are going to have to share the caregiving role,” he says. “I grew up in a time where very few women worked outside the home and now very few don’t. So, who’s going to look after our seniors? The biggest cause of employee absenteeism in the U.S. is eldercare.”
The problem will only get bigger, and Landry will tell you we’ve only just begun to deal with it. But as the baby boomers hit age 76, we will all really start to feel the strain of taking care of so many seniors. He predicts we’ll really start to see the most long-term care claims in 2022, when the baby boomers turn that age.
So now’s the time to really seriously consider applying for long-term care insurance. Landry knows that the application process is pretty reasonable, especially that of Sun Life’s new long-term care product, which opens up long-term care to those who may have had some health scares in the past.
“Sun Life’s Retirement Health Assist Plan includes no coverage for at least five years, so it helps those who’ve had some health problems still get coverage. If the client isn’t eligible for traditional long-term care insurance, but is eligible for the Retirement Health Assist plan, which just launched in early December, 2013, Sun Life says they will tell the client right away,” says Landry. Retirement Health Assist also offers the client a rolling five-year guarantee on the pricing, similar to their traditional LTC, (but superior to most other companies’ products), which is the biggest single reason he endorses it.
In the future, Landry hopes to see more advisors involved in selling long-term care insurance and the insurance industry doing a better job teaching insurance advisors how to talk to clients. “About a year ago, I attended a conference on long-term care at the Windsor Hotel in Montreal, and the average age of the advisors there was about 35 or 40,” he says. “First of all, you never see 35- to 40-year-old reps. They’re usually 60- to 70-year-old reps. However, I hope this gets more people talking about long-term care.”
Though there are some brokers working in the long-term care realm, more are not selling the product, Landry says, overlooking the need out there entirely. “It really comes down to one thing: when I was coming up in the industry, the training we gave to brokers was eighteen words. ‘It’s easier to talk to your clients about disability insurance than it is to talk about life insurance.’ This is where the training started and ended. So, what happened? Advisors went out and sold their best clients and their best clients got rated or declined,” says Landry, and the advisors stopped talking about living benefits.
“If you talk about living benefits to your average 50-year-old advisor, it’s like mentioning pork to an observant Jew or Muslim. They won’t talk about it,” remarks Landry.
Nobody wants to think that anything will ever happen to them, and this reticence always comes back to haunt them later on. One way to get sales up, though, according to Landry, is to start talking to more women. “When I started in this business in 1969, there were two million people living in the Montreal area and only two licensed female advisors. Now, there are a lot more female advisors, but even with the huge growth in female advisors, as a consultant, only 5% of the calls I get have to do with female clients,” he says.
Another discrepancy is that no advisor these days would ever accept that a potential client has 100% of their life insurance needs covered by their group plan, and yet, when it comes to a client having living benefits coverage in a group plan, the conversation ends. David’s wife and my brother are suffering greatly today because all they had were group plans. “To me, this is the largest potential market that we have — clients who think they’re protected with group plans,” says Landry.
The problem is that group coverage is very restrictive compared to traditional individual plans. Often, the coverage is not enough and when it comes to living benefits like disability, you have to be totally disabled in order to have decent coverage, and partial disabilities aren’t adequately covered.
So long-term care not only is something that makes financial sense to invest in, but if it were up to Tim Landry, you’d also be buying a policy right now.