LONG-TERM CARE
Stress testing
When was the last time you stress tested your client ’ s portfolio , your book of business , or , for that matter , your own financial plan against an unforeseen event ?
Jeff Levin leads a team of Care Solutions regional sales directors at OneAmerica and is a 25-year veteran of the long-term care ( LTC ) industry . Contact him at jeff . levin @ oneamerica . com .
1 Cleveland Clinic ’ s website on stress 2 University of Florida Health ’ s website on stress 3 Genworth website referencing the
2020 Cost of Care Survey
The year 2020 will go down in history as unprecedented . Perhaps , years from now , when you look up “ unprecedented ” in the dictionary it will show 2020 as an example . This year , we learned to do things differently : new ways of conducting business , visiting with friends and family , supporting our kids and dealing with stress . S-T-R-E-S-S !
Typically , we think of stress as a physical or mental tension . In fact , according to the Cleveland Clinic , stress is a normal reaction the body has when change occurs . The body can respond to these changes physically , mentally or emotionally . 1 It can come from any event or thought that makes you feel frustrated , angry or nervous . Stress is your body ’ s reaction to a challenge or demand .
The good thing is that stress is usually temporary . Stress can even be good . “ In short bursts , stress can be positive , such as when it helps you avoid danger or meet a deadline ” ( like writing this article )! 2 Relieving cures for stress are plenteous and include : physical exercise , meditation , completion of a project or reaching a goal .
How much can you handle ?
Interestingly , tests can be conducted to determine how much external stress we can handle . Usually this is in the form of a stress test conducted to determine how our cardiovascular system is performing and how much it can tolerate . A medical team of professionals conduct these types of tests in a controlled environment .
However , people aren ’ t the only ones that are stress tested . Computer manufacturers , automotive makers , banks and insurance companies also perform regular stress tests . Heavy loads of data are pushed through computer processors to test stability issues . Auto manufacturers put vehicles , components and systems through a series of laboratory , virtual , and “ real world ” assessments to ensure it is safe , reliable and compliant with safety regulations . Banks use stress testing to determine if there ’ s enough capital to withstand a negative economic shock . For insurance companies , stress tests are performed to see if a specific event or condition causes significant movement in a set of financial variables and to ensure holdings and other assets are adequate . In simple terms , stress testing is a risk management technique used to evaluate potential effects that may prove to be harmful .
Retesting
As insurance and financial professionals , we pride ourselves on creating financial plans , investment portfolios and estate plans to meet the needs of our clients both today , tomorrow and for future generations . When was the last time you stress tested your client ’ s portfolio , your book of business , or , for that matter , your own financial plan against an unforeseen event ?
28 Perspectives Q1 2021