Reinventing retirement: Innovating long-term care

More than three-quarters (77%) of adults 50 and older say they want to stay in their homes as they age. However, this dream can become a nightmare for millions with perilously inadequate long-term care plans. Fortunately, the insurtech industry is developing innovative solutions designed to drive this new vision of successful aging. 

Today, clients face the convergence of three major trends that threaten to derail their aspiration to enjoy a happy, healthy retirement at home. The retirement crisis remains a menacing presence. Overall, 80% — or 47 million households with older adults — are financially struggling or at risk of economic insecurity as they age. Recent research also shows a short-sighted attitude regarding long-term care services. While 70% of retirement-age Americans will need ongoing care at some point, merely 14% are very confident they'll be able to afford it. Lastly, our country's health is bleak, having the lowest life expectancy among high-income countries.

As the graying globe continues – adults age 65+ expected to reach over 80 million by 2040 - the onus is on us to empower people to effectively age on their own terms. Promoting the pursuit of this new American dream presents the unique opportunity to help heighten clients' long-term care readiness while bolstering business profitability. 

Today's rapidly aging society must prompt a paradigm shift within the insurance industry marked by fundamental change in the attitudes of professionals and how they perceive and service their clients.  

The inherent nature of the agent-client relationship has been somewhat fractured amid carrier business directives to increase rates and decrease payouts or claims. This long standing approach must evolve into one centered on a "best alignment of interests" model that creates a mutually beneficial partnership between carriers, agents and policy holders. 

Although older U.S. adults represent the largest group facing financial hardship, the critical topic of long-term care is often ignored due to a lack of awareness. One of the most common, and perilous, misconceptions among agents and policy holders is that Medicare covers long-term care. The fact is that Medicare only covers basic medical needs, and not long-term care services. 

This is a highly underserved market to which agents can lend their vital support as a partner in promoting extended quality of life. Be proactive in formulating a plan to help clients live the best possible versions of their lives. 

Advance innovation

The Baby Boomer explosion means professionals will experience a surge in clients who are painfully unprepared, and whose specific needs must be addressed. 

Despite the population's urgent need, long-term care insurance purchases are declining with 2022 marking the lowest sales volume in over two decades. This trend is understandable due to heritage issues like inaccurate assumptions, which led to significant rate increases, lack of product innovation, agents and carriers dropping out of the market and overall consumer perception of the segment. 

The insurance sector must foster innovation that will ignite behavioral and buying changes and safeguard elderly individuals from financial insecurity during their retirement phase of life. 

Begin with an application overhaul. Innovation can streamline the LTCI application process, which has traditionally involved in-person exams and lengthy procedures that frustrate consumers and result in high rejection rates. Today's improved risk selection and application processing techniques enable insurance products to provide decisions within an hour, leading to better risk selection and significantly improved consumer experiences.

Innovation is transforming claim handling making the process more efficient and precise. Automated initial claims routing streamlines the process and swiftly direct claims to the appropriate department or personnel for evaluation and next steps. We must replace legacy systems with automation that saves time and resources, leading to faster response times and reducing the risk of claims getting lost or mishandled.

Additional advancement areas exist in identifying potential policyholders who might require assistance and make future claims for health challenges. Those opportunities require insurers to analyze massive data sets mapped against population health metrics.

Small preventative steps bring mutual benefit

Preventative services play an integral role in protecting and promoting health, yet only 5% of adults 65-plus received these recommended services in 2020. By using data analytics and predictive modeling, insurance carriers can reach out to these individuals, offering assistance, guidance and resources. This approach can prevent or mitigate problems, helping policyholders maintain better health and quality of life.

There's a difference between living well into old age and living "well" into old age. Therefore, some insurance carriers are incorporating creative wellness programs into their pre-claim processes. They offer policyholders access to targeted, personalized health and wellness services like fitness programs, nutrition counseling, mental health support and preventive screenings. One example is Assured Allies' NeverStop, an innovative Wellness Rewards Program that's built right into your insurance policy. By encouraging healthier lifestyles and early intervention, these insurers reduce the chances of claims arising from preventable issues while improving the overall customer experience, building stronger and deeper connections.

Small interventions can make a huge impact on health and well-being. Falls are the leading cause of fatal and nonfatal injuries for people 65+, with one out of four  falling each year. Simply installing a grab bar in a bathtub can decrease fall hazards by 76%. And, treating hearing loss may lower the risk of dementia, with hearing aids reducing the rate of cognitive decline in older adults at high risk by almost 50% over a three-year period.

The inevitable reality facing insurers must be addressed to offset its accompanying significant cost. We should be encouraged by what we are seeing, as insurtech companies are introducing innovative solutions that can revolutionize the insurance industry and fill this gap. These efforts are powered by our social obligation to serve the needs of the growing elderly population, and the business opportunities they present. It's incumbent on carriers to push harder for innovation and meet consumers where they want to be – enjoying a healthy, active retirement on their own terms.