Getting Clarity from the Carriers
AMID THE ONSLAUGHT OF MEDIA cover-
age respecting Glenn Neasham’s conviction for
selling an annuity to a 83-year-old senior diag-
nosed with Altzheimer’s Disease, many of our
readers are asking how they can guard against
a similar fate. One place to look for guidance,
clearly, is your annuity carrier.
Unfortunately, many annuity providers don’t
have well-developed programs to aid agents in
dealing with clients or prospects suspected of
being cognitively impaired and, thus, not wholly
competent to consummate a product sale. This
is a significant oversight for an industry that has
devoted much time and resources to helping
producers determine the suitability of an annuity
given the client’s age, financial resources, life
goals, risk tolerance and other criteria.
Knowing how to custom-fit a product to the
client profile is all well and good. But if the pros-
pect doesn’t seem to fully understand or remem-
ber what the agent discussed during a product
presentation, then the insurer in question
needs to be able to invoke procedures to decide
whether or not the producer should proceed with
the sale.
For agents, the issue is likely to grow more
urgent in coming years, as many of the estimat-
ed 13,000 of 78 million baby boomers who are
daily turning age 65 have some form of demen-
tia. Topping the list: Altzheimer’s Disease, which
is the 6th leading cause of death in the U.S. and
the 5th leading cause of death for those aged 65
and older.
According to a March 2012 report of the
Altzheimer’s Association, 5. 4 million Americans
are now living with Alzheimer’s— 5. 2 million aged
65 and over, but also 200,000 under the age of 65.
By 2050, up to 16 million Americans will have the
disease. Of Americans aged 65 and over, 1 in 8
has Alzheimer’s. And nearly half of people aged
85 and older have the disease.
These numbers add up to a minefield of po-
tential lawsuits. Thus, producers like Neasham
need to have a plan in place to recognize early
warning signs of mental disease; and, once iden-
tified, to take their concerns up the chain of the
command so as to minimize the possibility of civil
62 National Underwriter Life & Health • May 2012
Warren S. Hersch
Senior Editor
or criminal actions after the sale.
One insurer with a program to help
agents address mental cases is Pru-
dential Financial. John Gordon, vice
president of business quality for the
Newark, N.J.-based company, says that
Prudential’s Health and Wellness group
spearheaded a training initiative in 2009
for its career agent field force, as well
for its back-office/operations personnel.
“We wanted to know what the red
flags are that our people should look for
pertaining to diminished capacity in se-
nior clients,” says Gordon. “Per a FINRA
notice to member companies, we also
wanted to indentify signs of physical or
financial abuse that seniors may be suf-
fering at the hands of family members,
such as the use of coercion to make a
particular individual the beneficiary of an
annuity or life insurance policy.”
In respect to the first—diminished capacity—Gordon identified several
warning signs that might point to early-onset dementia. Among them: a
client’s inability to understand or recollect product features and benefits the
agent described only a short while ago; waiting for the agent’s approval to
speak; trouble in processing visual images and special relationships, such
as documents to review; difficulty in solving problems, like working with
numbers; and confusion as to the time or place of a meeting.
