In this insightful Q&A, RGA’s Harvey Brandvein and Nathan Berggoetz from the U.S. Individual Health team share their vision for strengthening protection for middle market long-term care funding needs.
Harvey: Coming to RGA after my decades of experience in marketing long-term care insurance is, for me, an opportunity to leverage that experience to develop products and services that will make a positive difference. I was for many years an insurance agent for General American (RGA’s original parent company) and later a financial executive for various banks and credit unions. Long-term care is an issue that resonates a lot for me: My own family had to deal with the logistics of providing and paying for my grandmother’s care when she could no longer care for herself.
Nathan: I came here after 14 years at Deloitte, consulting to the insurance industry. I believe the market right now is ripe for long-term care insurance (LTCI), and I want to be able to work on initiatives that can fill the need and see them through to completion.
Harvey: Insurers and consumers know there’s a real need to support families with loved ones who have long-term care needs. But LTCI has never been an easy product to underwrite or sell. One of the main issues is that it’s not attractive to agents: the sale is time-consuming, with reams of paperwork; premiums are high and keep going up; commissions are low; and with all the touchpoints that can trigger declines, agents know they will put in time that may not result in a sale. They would rather sell an easier product to explain, such as a life insurance or annuities.
Nathan: Also, right now, there's a lot of fear among insurers, and few are willing to come back to this market.
Harvey: We would like to see the LTCI buy be as easy as a few clicks on a mobile phone. The industry knows it needs to change the product, but for many years, developers have mostly recommended small adjustments to existing products and product frameworks. This has made today’s LTCI product extremely complex and very expensive. We’re seeing some older ideas re-emerging, such as combination policies – a life insurance chassis with a rider that can pay out for a policyholders’ LTC needs while they are still alive. We’re also seeing novel thinking about policies that escalate coverage as policyholders age and coverage that lets seniors age in place, both of which can benefit the middle class.
Nathan: Market interest is also increasing for a middle-class-focused product, such as the caregiver insurance product RGA introduced in 2020. This product is designed to be bought by family members still in their working years to provide financial support for a loved one’s long-term care needs.
Harvey: The whole industry knows something has to be done. We’re seeing this in countries around the world, where insurers are already producing eldercare solutions for now and into the future. One thing I’d like to see is for all life insurance companies to offer LTCI to their employees as a worksite benefit. That will help the product to be better understood, as it will be more familiar to the workforce.
In the U.S., I think keeping lines of communication open – talking to clients; providing education, guidance, and support; and then encouraging them to take educated risks – may be key to overcoming that reluctance. Companies already have decades of actuarial, business development, and technological expertise in the product. And right now mountains of new data are available for data scientists to analyze, and we can innovate to build novel products that can be sold in new ways.
Nathan: Covering healthcare needs entails a lot more than just offering long-term care solutions. We are looking at offering reinsurance support for more product lines, including disability income and Medigap.
Nathan: RGA has a real opportunity to define how the insurance industry can move forward with developing more accessible long-term care insurance.
Harvey: Working at RGA gives me a platform from which to make a difference and leave a positive legacy. When I’m done with my career, I want to be able to say I helped make financial protection for long-term care needs accessible to all.
To learn how RGA long-term care insurance experts can help develop solutions for your LTCI business, contact us.
