Sometimes I am unclear whether our industry is in the happiness or sadness business. I guess it is the latter but if we didn’t exist situations would be very much sadder and infinitely harder to deal with than they are when insurance cushions the blow.
I have recently been going through the very difficult situation of looking at the options of care for very sick and frail parents. It is a heartbreaking business and one that I have often thought through and then filed away in a space in my emotions which I might label “too difficult to deal with”. I have lots of friends in exactly the same situation and it causes all of us enormous anguish. When Peter Drucker claimed that the biggest problem of the 21st century would be the ageing of the population he was – as was so often the case – absolutely right.
Amazingly (or is it really amazing?) our industry has not made significant progress in handling long-term care (LTC). Neither for that matter have successive governments. It is over twenty years since LTC was heralded by all sorts of people, including me, as the next big thing in insurance. In those twenty years we have seen the emergence of some awesomely dedicated and competent advisers, of whom I know and respect many, but we haven’t seen the same development in terms of LTC products. Twenty years ago many people thought pre-funded LTC products were unnecessary because people would have pensions that would adequately fund their LTC. How hollow that suggestion seems now! How uncertain it is as well that we will always have enough equity in our house to release to fund care. 21st century assumptions have changed a lot!
Assigning someone to long-term nursing care is a horrendous thing to have to do and I am very conscious that I want to relieve my family of any financial burden if I or my wife should need this sort of care in time to come. What I guess I can never do is to relieve them of the sort of emotional burden we are carrying at the moment. Whatever the solution you find it will never totally convince people that they have done the right thing, because the decisions you have to take are so tough and often seem so cruel even if they are made with the very best of intentions.
And yet, having said all of this, I am still not sure that if there was a range of pre-funded LTC products that I could buy now, that I would do so. It’s just such a hard purchase to will yourself to make. When you need to buy it, it’s far too expensive and when you can afford it you have many other financial priorities.
This has been an article that outlines a lot of problems and little in the way of solutions but maybe there is a role for a different sort of lifetime disability plan that acquires a cash value and changes its definition of incapacity when you retire from work, to become a product that at least partially funds a care package. It’s a 21st century sort of option for a very serious 21st century problem.