Today, the credit-union world is a very busy place. It’s competitive, margins are tight, demographics are shifting, technology is racing forward, and regulatory compliance issues aren’t exactly in short supply.
It’s important in our crazy-paced world that we don’t overlook the opportunities that credit unions have in abundant supply in the form of an aging membership. It’s understandable that credit union people are pursuing the Millennials who will be our borrowers, but success with convincing that group is not always an easy task and it may take awhile.
In 2011, MyCUSurvey, a survey of credit union members across the county, reported that 75 percent of credit union members are over the age of 50! If that is true, or even close, that’s 75 million members.
The rising need and risk of long-term care
Today, our credit-union members will live longer than ever before. Modern advances in science, medicine, and health care are extending their lives well beyond their retirement years. Many who would have died of a medical condition two decades ago can now live for a long time to come. It’s not uncommon in today’s world for one member of a married couple to live into their 90s, and the other to live into their 80s – that’s more than 25 years of retirement if they retired at the age 65! It’s estimated that three out of four of our Baby Boomer members will live long enough to need some kind of long-term care. How many of our members have planned for the eventual need of long-term care? How many have asked themselves these questions: who will provide the care I will need; where will I receive the care; and how will I pay for it?
Our aging membership has worked very hard for what they have and, for most of them, we have been with them almost every step of the way. For some of these valued members, the assets they have worked so hard for and their quality of life are at risk. We serve so many, and we are in a great position to help them protect what they have earned. Many of our members already protect themselves from financial risks by purchasing homeowners insurance, auto insurance, life insurance, and health insurance. They purchase these insurances with the hope that they will never have to use them, but in the event that something happens, they have minimized the risk to the assets they have spent a lifetime building with us.
What are the 75 million credit-union members over the age of 50 concerned about most in their future? When asking the Baby Boomers this question, the overwhelming reply is: that I will outlive my money in retirement. The average cost of care nationally is approximately $84,000 per year in a skilled nursing facility, and the costs continue to rise. The cost of long-term care is possibly today’s largest financial risk to our members.
Today, less than 10 percent of our seniors have private long-term care insurance. Why? Mainly because the general public is undereducated about the options available for long-term care insurance, and because they are under the impression that the government will provide it through Medicare and Medicaid. The government will provide long-term care, but only for those who are destitute. Those without long-term care insurance must spend nearly all of their own assets before they can even apply for government help through Medicaid.
Providing members with quality long-term care assistance and asset preservation creates a great opportunity for additional fee income. Credit unions are in a trusted position to approach members for this coverage and to negotiate the best commission split with a trusted advisor. With all the external threats facing fee and other income these days, credit unions need to leverage every reasonable opportunity. An aging majority membership, longer lives, and ever-rising healthcare costs create reasonable opportunity credit unions should strongly consider.
Why it really matters
Rosalynn Carter, wife of Jimmy Carter, former President of the United States, and an advocate for caregivers made this statement: “There are only four kinds of people in the world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.” Long-term care will, at some point, touch each one of our lives in some way, sooner or later.
My grandmother has been in an assisted living facility for several years now. She has Alzheimer’s and needs fairly constant care. The average length of care needed for those with Alzheimer’s is between six and eight years. Why? Because those with Alzheimer’s have cognitive and memory issues, but are otherwise healthy and tend to live longer.
She lives in a private facility, where she receives the care that she needs. Although she doesn’t know who I am when I visit, it warms my heart to see her familiar smile…to see her happy. Long-term care insurance has given my grandmother the opportunity to get the care she deserves, to receive the care at a place of the family’s choosing that is the best for her, and all the while preserving her dignity and her financial security.
This life-changing event, among others, has caused me to ponder and reflect on what I can do, what we can do together, to educate the families in our communities about their options and the benefits of early planning for long-term care. Offering our services and inviting our members to take advantage of provided educational opportunities will help protect them and their families.