Long-Term Care: Long-Term Care Insurance Companies
Guest: Barbara Franklin – Owner, Franklin & Associates
Host: Sally Hughes Smith - Artist, Author; The Circle – A Walk with Dementia
Sally Hughes Smith: Welcome to Age to Age. I’m Sally Smith. Let’s talk. Barbara Franklin is with us today. She is a long-term care specialist. She is very well educated on all the ins and outs of planning and keeping your options open for how your life may unfold in your later years. One of these vehicles is long-term care insurance. I just heard you say that there are 45 different carriers in our area. This is a relatively new field. There are a lot of different ways this can unfold, and I’m sure there’s a lot to learn. How do you see all of this developing? What is the good, the bad and the ugly about it?
Barbara Franklin: Sally, that is a brilliant question, because it’s something I’ve been dealing with for the past 18 years. You may be familiar with the adage that realtors use so often: location, location, location. Well, the adage in our industry is: the company, the company, the company. Instead of worrying about how much it pays, and how long it pays, I think the company is, really, the primary point. We want to be sure that, depending on when you get it, your coverage, is going to be around when you need it. It wasn’t but about five years ago that there were 120 long-term care insurers, and now we’re down to 45.
Sally Hughes Smith: Really?
Barbara Franklin: A large number of them have decided that this wasn’t a market that they really wanted to be in. They’ve left the field, and in some cases, they were bought by another company. So, the policy holders still have protection, but there has been a lot of movement in this industry. And, in a way, it was healthy because it removed a lot of the players that really didn’t need to be there; that weren’t serious about it. So, I think the industry has evolved and matured, and I’ve been fortunate enough to witness this. And, with 45 players now, we’re able to identify those that are serious, that are doing a good job paying claims, and meeting the commitments that they’ve made to policy holders. And we have enough data now to know who those players are. It’s something I monitor very regularly.
I made the decision, in my practice, to help my policy holder with their claims. It isn’t really required. You receive a little card with your policy that has an 800 number, and anyone can simply call that. But, being here in the community, I felt it was important to help my policy holders, and their adult children, in many cases, to navigate their way through this, since long-term care insurance is so different than health and other types of coverage. So, I built it into my practice, and it’s been very interesting to watch how companies deal with the claim side. And I think it’s a very valuable piece of information I can give to the people that I work with, because they have no chance to observe that; no way to kick the tires on this product and see how it would really work. I get to see it every single day.
Part of the evaluation I make of the carrier is what it’s like when you call that 800 number. I would also say; and I don’t mean this to be disparaging about the industry, that, like many industries, they’re very focused on selling policies. Obviously, that’s important to the bottom line. But, agents are encouraged to sell, sell, sell and not really encouraged to do the kind of servicing and the kind of follow-through. I simply have the luxury after 18 years of being able to do that, and I’m glad that I can. I, unfortunately, find that the sales mentality gets in the way of what people really need to use this coverage in the right way.
Sally Hughes Smith: So, when you’re looking at a company, you’re able to say, these companies pay on time or, this is more difficult; you have to go through many more hoops to get them to pay?
Barbara Franklin: Exactly.
Sally Hughes Smith: That’s huge.
Barbara Franklin: I call it the hassle factor.
Sally Hughes Smith: But, you know what else? What you’re doing comes around in a good way. One, you live here. You’re building a life; you’ve built a life. To have somebody that is not an 800 number is just monumental. You give real help where it’s needed. Well, there’s, obviously, some sort of criteria for companies. I mean, not just anybody can go out and say that they’re a long-term care insurer. So, these 45, they’re licensed?
Barbara Franklin: Yes, Sally. For any carrier to operate in our state, they must be approved by the South Carolina Department of Insurance. So, that’s the first level of screening. But, any long-term care specialist is going to do their own due diligence to look at the financial history, the financial backing, and the track record of the company in terms of their premium stability, their claims payment history.
Sally Hughes Smith: So, that’s available to someone, an advisor, like you?
Barbara Franklin: Right.
Sally Hughes Smith: So, it would like the Better Business Bureau, where you can say, for example, that there have been a lot of complaints about this company, but that one has always gotten nothing but star ratings.
Barbara Franklin: Sure.
Sally Hughes Smith: Because, with 45 companies, there’s probably a lot of variety.
Barbara Franklin: Well, there is, and that’s where I spend a lot of my time; doing that kind of studying. I think it’s an advantage, too, to be in the category that I’m in. I’m essentially a broker, meaning I can represent any carrier that I choose to.
Sally Hughes Smith: I see.
Barbara Franklin: And I’m able to tell my clients the pros and cons of each policy, the things that I like; the things that are advantageous, and the things that I don’t like. We always hear people talking about the fine print in insurance policies. And it’s very difficult for the consumer to really navigate that. And it, really, is not until you deal with claims on a day-to-day basis that you find out what the fine print really is. And I feel good about my ability to say to people, there’s a little nuance here that you should know about which may impact your feelings about this coverage.
Sally Smith: So, you’re really an educated guide, explaining the options. Let me ask you one other thing. If you could be in charge of all the long-term care insurance policies, if you could change something about it, do see it improving in a certain way?
Barbara Franklin: That’s a really good question, Sally. I think what I’d recommend that the industry do is to make it simpler. In the effort to be competitive, and to make themselves stand out; one to the other, they’ve made the policies complex by adding all kinds of bells and whistles. And there are some bells and whistles that sound good on paper. But when you really analyze them, they don’t amount to anything. And, I think that the baby boomers would be more attracted to the coverage if wasn’t so onerous; wasn’t so complicated, and we could make it much simpler for them. I try to make it simple through my presentation of it to people. But I think the carriers could do a much better job in that area.
Sally Hughes Smith: It’s always so interesting to ask somebody, who’s an expert, what they would do. I remember asking Fran Emerson, head of the Alzheimer’s Association, what she’d do if she could do one thing for Alzheimer’s. Of course, she, after all these years and experience, she had some real ideas about what she would do to make that a better situation for people. So, it’s neat to hear what you have to say. I will keep my eyes open and see if those policies get simpler.
I’m with you. I told my husband that I want, eventually, to have a television that has an on button and an off button, and a volume button. He’s got so many bells and whistles, and options. I can do so many amazing things on this TV. The only problem is I that I don’t want to do them, and they get in the way of what I really want to do.
Barbara Franklin: Exactly.
Sally Hughes Smith: Thank you so much for being with us. It was a great pleasure to have you, Barbara. Thanks to all our listeners, too, for joining us. Please give us your comments on our Web site. This is Sally Smith, Age to Age, saying good-bye and wishing you courage and joy on your own journey. We are all connected.
If you enjoy listening to Sally Smith, you can buy her book; The Circle. It’s the story of how she personally responded to her mother’s journey with Alzheimer’s disease. It’s a wonderful gift of hope for anyone with a parent with dementia. Just click on Sally Smith’s name under the health professionals tab on the podcast homepage. All profits from sale of The Circle support research at the Center on Aging. Thanks.
If you have any questions about the services or programs offered at the Medical University of South Carolina, or if you’d like to schedule an appointment with one of our physicians, please call MUSC Health Connection at: (843) 792-1414.