We talked with Marc Glickman, CEO, and Founder at BuddyIns, about the trends, challenges, and opportunities he sees for the Long-Term Care Insurance industry and his new platform Benefit Buddy.
Marc co-founded a community of LTC planning advocates called BuddyIns, an insurtech for the LTC industry, whose mission is to provide education and technology to agencies, agents, and advisors that can help the over 50 million unpaid family caregivers and the next 50 million to come.
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(intro)
Beyond the Challenge is a podcast where executives in the insurance and financial services industry share their insights and experiences. Hosts Kevin and Sandy Dougherty talk with today’s top business leaders about what keeps them up at night and the biggest opportunity organizations can capitalize on today. We encourage you to listen, share, and subscribe to our program.
Kevin and Sandy Dougherty each have over 20 years of experience in insurance and financial services, corporate leadership, and executive search. They’re the owners of Global Corporate Solutions and Global Corporate Leaders. Global Corporate Solutions partners with organizations to gain efficiencies and contain costs. Global Corporate Leaders partners with organizations to enhance and evaluate talent.
Beyond the Challenge podcast is sponsored by Exactuals, perfecting payments and the data driving them; Techficient, transforming the protection journey with intelligent data and machine learning to drive better outcomes; and JourneyGuide, improving your clients’ retirement outcomes through interactive planning software.
Welcome to Beyond the Challenge. Here are your hosts, Kevin and Sandy.
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Sandy: Today, we’re talking with Marc Glickman, CEO and founder at BuddyIns. Marc is passionate about helping financial professionals prepare their clients, friends, and families for long-term care needs. Marc co-founded a community of LTC planning advocates called BuddyIns, an insurtech for the LTC industry. Their mission is to provide education and technology to agencies, agents, and advisors that can help the over 50 million unpaid family caregivers and the next 50 million to come. Marc, can you tell us a little bit about yourself and BuddyIns?
Marc: Yeah, Sandy, Kevin, thanks for having me on. I’m really appreciative of the awareness that we can spread about long-term care planning. I know many of your listeners out there are advocates for it, like we are. I started my career as an actuary, spent about 11 years designing long-term care insurance products for some of the major carriers in the market and realized that there was a gap in terms of consumer awareness and marketing. So I really started BuddyIns to build a marketing technology platform to help agents and BGAs get more awareness out there and generate more opportunities to offer long-term care insurance and we’ve since morphed into providing technology to make the ecosystem better so that the products can be sold at an easier way by the agents themselves. So, at this stage, we see a lot of traction with getting individual and group long-term care solutions to market.
Kevin: Marc, all sectors face challenges, but for the long-term care industry, the list seems especially long. Between the complexities involved in underwriting LTC as well as new state regulations, the LTC landscape seems to be changing faster than the average producer can keep up. Can you start by telling us why you started BuddyIns?
Sandy: Yeah, so, in my opinion, we have a supply problem in the long-term care insurance market, not a demand problem. Maybe 20 years ago it was hard to convince clients the importance of long-term care planning, they would say, “Hey, I’ll go out in the backyard and take a gun and take care of this myself,” that type of thing we probably heard a lot. In today’s world, though, the reality is very clear. There’s 53 million family caregivers, right? Think about the number of US adults, 1 out of every 5 that’s affected by long-term care directly, and now planning is never a controversial topic. Whenever we talk to people about planning, 100 percent of people agree that that’s a good idea. The problem is that there haven’t been as much products in the market and there’s a shortage of agents that are really fluent in how to present the value of long-term care to those clients. So, from our perspective, it’s not a challenge but an opportunity to figure out how do we make it easier for the agents to offer the products and work with the carriers to create solutions to make the business side of it easier, because when you have a large amount of demand, there’s an opportunity to be able to offer the products. And that’s why we started BuddyIns.
Sandy: Thanks, Marc. So how is BuddyIns helping BGAs and individual producers educate families about the benefits of LTC?
Marc: Yeah. Well, as Kevin pointed out, there’s a lot of challenges in that ecosystem, from bringing awareness to the need, to developing the right solutions for that client in a consultative fiduciary type of way, to the products themselves in terms of underwriting and the application process. So, what we’re doing is we’re going step by step through that ecosystem and we’re modernizing it by adding digital technology on the marketing side and digital technology that engages with the carrier and integrates with them so that the value of the solutions is much more apparent, both to the agent and to their client. And the way that this benefits the BGA community that we serve is that, currently, they’re offering long-term care in a way that doesn’t generate a lot of business but does require a lot of work in terms of the quotes that they have to run, the underwriting support that they have to do. So we’ve given BGAs a self-service option, both a training platform for agents but also technologies that they can use self-service to run their own quotes and we’ve given them another model where they can partner with a specialist on a joint work basis if they find that it’s too difficult to do themselves and that alleviates a lot of the cost and the burden on the BGAs’ back office.
Sandy: Marc, is sounds like a great plan. Is anyone else out there doing this?
Marc: Yeah, you know, the long-term care marketplace, because it has declined, there’s much fewer agencies out there that really specialize and focus on it, so while there are some, most of them have taken the approach of going into the group long-term care market where we see 50 percent year-over-year growth, and Buddy does provide solutions to both the group and the individual market, but on the individual side, I would say we’re fairly unique in the fact that we’re trying to grow the market from its current low level because we know that, in addition to the group solutions, you always have to have those individual products to provide that higher end coverage and take advantage of tax deductibility and other aspects.
Sandy: Great. So, what’s the biggest challenge you see facing the LTC carriers today?
Marc: The biggest challenge is the fact that there are so many legacy blocks of business that have underperformed and it’s difficult to get an executive that had that bad experience to want to get into long-term care again. Luckily, because there’s a lot of different types of solutions like hybrid products that have de-risked some of those concerns, there’s a lot more willingness to do it because it feels like it’s a fresh start with a new idea and not going back to something that they feel has failed in the past. The other thing that’s a benefit to the insurance industry overall is the rising interest rate environment does make it easier and less costly to provide long-term care solutions because the duration of those liabilities are so long that an interest rate increase has a much more dramatic effect of decreasing the pricing and making it more affordable for consumers.
Kevin: Marc, what do you see as the biggest opportunity for LTC insurance carriers over the next three to five years?
Marc: By far, the biggest opportunity in the market today is with employer groups and affinity groups, primarily because the state payroll taxes themselves, we can debate whether they’re a good thing or a bad thing overall, they are generating a lot of awareness, demand, and when your clients are asking you for long-term care, you really pay attention. So that’s driven a number of carriers that are on the group side to add long-term care writers to their group products and a whole new group of agents, especially in the employer benefit space, have a variety of tools but they need help from long-term care specialists to understand how to educate and enroll the groups. So that marketplace by far is going to be the largest delivery vehicle for long-term care solutions in terms of the number of people that it serves. I would estimate that probably over 400,000 people this year are getting group long-term care, and on the individual market, if you add the traditional market and the extension rider or hybrid market together, that number is probably about 60,000, so you can really tell that when your neighbors are getting long-term care from their employer, you start to pay attention and you want to be involved in that ecosystem to offer these products and we’re starting to see these worlds colliding where individual agents are getting much more involved now in group business and learning how to operate in that group side.
Kevin: How do you see distribution for long-term care products changing over the next few years?
Marc: I think because of all the layers of education and process involved today, the most effective agents are ones that focus in long-term care, we would turn them long-term care specialists. As the process becomes easier and the products become maybe even guaranteed issue in the group side, we can see another type of agent developing. We’re seeing it first with that employer benefit space where they’re adding it to their other voluntary benefit products, but we will see it with advisors and agents as well as it becomes easier to offer those solutions. So my bet would be that the specialists will probably take some of those other entities into the market because they need help with their existing client base, and as they learn it and it becomes easier, they’ll start to do more themselves as well.
Sandy: So what advice would you give to carriers who are working with independent producers who want to sell more LTC?
Marc: Well, carriers I think have a critical role in the ecosystem. Like I said before, it’s a supply issue and having more solutions is really critical to that. But understanding the long-term care sales process oftentimes is not well understood by the carriers, like it is for others that are in distribution that have not offered long-term care before so, sometimes, the critical steps like just the need for long-term care and that awareness of how to offer it from that perspective are lacking at the carrier side. The more solutions that carriers can provide in developing awareness and providing wraparound services, the more likely it is that they’ll engage with the client. So, for example, we partner with a company called TCARE which provides resources and technology to help family caregivers. So if you have a client that comes to you and says, “Well, I’m interested in long-term care planning but first I need to have a crisis and I need to help mom and dad,” having a wraparound solution provided within the insurance product that does both of those things can build a relationship which is what you need, ultimately, and then will obviously develop a much more likely sale for you in terms of that client wanting to plan for themselves. So I think the carriers will start to expand overall the end-to-end solutions they’re providing, not just for the insurance funding but also for other ancillary services like caregiving.
Sandy: So you might have kind of answered this question with that one there but what is the next big thing coming to the LTC industry? Do you think it is the riders? Do you think it’s the group? What’s the big thing that’s going to change the industry other than BuddyIns, of course?
Marc: Well, I think it’s already changing and we’re beginning to see that already today. So, the group side is giving people a way to access a much less costly, what I call foundational long-term care plan or a starter plan, so you can get somebody who’s 40 years old a $50-a-month product that provides good value. If they need it early on, they’re going to have protection in case of an accident or early-onset Alzheimer’s, and if they need it in their later years, they can always add an individual policy and stack coverage and get more comprehensive coverage. But what these group plans have allowed us to do is to acquire more customers. Now they own long-term care, they’ve been educated on it and they’re much more likely to understand the gap towards the cost of care and be seeking out additional coverage once they own the product. So I think these group products are actually a gateway into that mass market and also a gateway to expand into that higher end market. We’re also finding that there’s much more willingness to fund an executive carve-out, which, 15 years ago, might have been a 10-pay policy and higher end policy for higher earning executives. Today, it’s actually a $50- to $100-a-month policy that’s provided by the employer that allows you to acquire 25 advocates in an organization that now own it and are now telling other people on a voluntary basis why they should be buying it for the masses. And, of course, they can also deduct it and buy higher end coverage on top of that. So, even the executive carve-out concept has changed because of the new products that are in the market allowing us to do this, which is a credit to those carriers that are kind of thinking outside the box to allow for this type of strategy now.
Kevin: Marc, what is your opinion about the future of regulation and compliance for the long-term care industry?
Marc: Yeah, that’s a loaded topic whenever we talk about regulation and compliance. My view of it is, on the regulatory front, we have a lot of states that are running out of money for Medicaid and so there’s this vested interest in creating solutions on the private market but also potentially things like this payroll taxes that are happening in certain states, like Washington and in California now, to collect revenues to fund public programs given the lack of penetration of private solutions. And with those working hand in hand, you create kind of the ideal environment because you have a situation where people don’t want to pay the tax, they’re incentivized now to buy individual products, but we want them to buy the product not for just the opt out but for the value of the solution itself. So that’s the biggest trend that we’re seeing right now and I think the political environment should embrace that change and the private industry should also embrace that change to partner together to leverage the marketing that that’s driving. I would venture a guess that every employee in Washington knows what long-term care is, and that’s a really hard thing to do so it’s not the fact that there is a tax, it’s the fact that there’s awareness and that awareness actually has driven a lot of positive results, not just the negative implications of having the tax. Similarly, with the federal program, when they had the CLASS Act that they tried to launch 15 years ago, that was always the silver lining was that the mass education that could happen because of a government program, so I think you can leverage that education without actually creating the costs or disincentives that benefit both sides of the aisle and both sides in terms of the public and private markets.
Sandy: You know, if the government would do a campaign like they do for non-smoking, everyone would have long-term care.
Marc: That’s right. That’s right. And, eventually, it’s going to happen anyway because the caregiving crisis is out of control and there’s a shortage of quality caregivers so something’s got to give and it’s going to soon elevate itself to a major issue that’s going to make the politicians have to pay attention to it.
Kevin: Marc, what is one of the best decisions that you made that had a positive impact on your career?
Marc: Well, I have to give credit to my dad who’s also an actuary and a pioneer in long-term care because he taught me the give to get philosophy, which is becoming, of course, more and more popular, which is add value, do what’s best for your clients, do what’s best for your partners, create an ecosystem where everyone wins, and you will grow in your business. And we took that view with BuddyIns when we first started off, it wasn’t a focus on revenue, it was a focus on educating, adding value, and creating a bigger audience, and that has paid dividends to us today because as we have more technology and services that add value, we have this large audience now that’s engaged with us that’s ready to support us and advocate for us. And most of our top partners really believe in our mission, more so than anything else, so not only are they referral partners that are sending us clients or specialist partners that are working with clients and they’re putting extra effort into it because they really want to support the community, but they’ve also become our top agent trainers because they’re also giving back and educating people that you might think are their competitors, just realizing that this ecosystem has so few agents and more opportunities that the more people you partner with, the more likely it is that you can grow your business. So just following that philosophy, I think, is the best decision that we made and building this as a community approach allows us to open the door to all kinds of new business opportunities for ourselves.
Sandy: So what advice would you give to somebody looking to get into the long-term care industry?
Marc: The advice that I would give is make sure you leverage the experienced people that already know how to do it. Don’t ignore it because you want to do it a different way because you might think the system’s broken, really see what value is there, tried and true fundamentals, and then see how you can add value to that ecosystem. And, ultimately, we have free study groups and we have webinars and there’s a lot of ways to get that education and I would seek that out and then you can craft a strategy without having to learn the hard way because people that are starting off as long-term care specialists, for example, oftentimes spends years before they actually can make it economical, whereas if you really leveraged what works best out of the gate and the technology that’s already there, you can obviously develop your business a lot quicker.
Sandy: So with your new BuddyIns software that’s out there, who is going to get the most of it? Who is the best to partner with BuddyIns to grow their business?
Marc: Yeah, I would say those BGAs and IMOs that have a heart for long-term care or advocates in the past, have the right aging community are probably the best served because really designed this to make it a more economical model than the current model of running quotes and so not only are we reducing costs but we’re increasing the effectiveness of BGAs and IMOs, but also carriers. We partner with a lot of carriers and a lot of new carriers coming out with innovative products, we can actually promote them and their sweet spots much more effectively so I would say as an ecosystem, helping both of those two groups, then filters down to agents and, ultimately, to the consumer, and the experience that the consumer has, which is what’s most paramount.
Sandy: Great. Marc, thank you for your time today. It’s been great to hear your insights on how long-term care is helping Americans have the necessary resources and education to afford quality care. We appreciate your time.
Marc: Thanks for having me on.
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