Thirty years ago the Los Angeles-based insurance company that Murray
Gordon worked for left the Illinois market, leaving him out of a job. "I
was just devastated," he said. "I was a company man." Gordon changed
from company man to company owner. After a good friend in Seattle showed
him how he could go into business for himself selling long-term care
insurance, an obscure product at the time, Gordon started working from
home with part-time help from his wife.
Maga Ltd. since has grown to nine employees in Deerfield, Phoenix and
San Diego. With the increasing costs of health care and the aging
population of baby boomers, Gordon says, sales are growing about 15
percent a year.
The company is a family affair: Gordon, son Brian and son-in-law
Peter Florek work in the Deerfield office, while another son, Geoff,
brings in business from San Diego. Jay Zandell, who extends Maga's reach
to Phoenix, isn't family, but Brian has known him since they attended
the University of Kansas together in the '80s.
Gordon has maintained Maga's original sole focus on long-term care
insurance, which used to be nicknamed "nursing home insurance," since
that was where most long-term care was offered.
Today, though, the insurance also covers at-home care and adult day
care, whether it's to help cope with age, disease or an accident.
The typical enrollees are in their 50s and have some assets, Brian
Gordon said. The initial yearly premium might range between $1,500 and
$3,000, depending on health history and the extent of coverage.
Maga maintains about 5,000 policies, with revenue from initial
commissions and residuals now $21 million a year. "We've got policies
that (have been) on the books for almost 30 years," Murray Gordon said.
Most of those policyholders are individuals, he said, but he expects
that to change soon. The number of policies arranged as a company
benefit is growing, he said, because the premiums are tax-deductible.
Seven million Americans now have long-term care policies, said Jesse
Sloam, executive director of the American Association for Long Term Care
Insurance. Most of those in their 50s, the "prime market," have at least
heard of it, but people are still learning the basics - what it covers,
what it costs and what they need.
Sloam said there are about 100,000 producers capable of selling
long-term care insurance. But only 2,000 to 3,000 of them are
specialists like Gordon, he said, and few have been at it so long.
Charles "King" Perkins is a financial adviser who recommends Maga to
clients considering long-term care insurance. He said he first heard
glowing reviews of the company from other fee-only advisers who, like
him, take no sales commissions or referral fees.
"They're experienced," Perkins said. "They're really very
knowledgeable. They will help people like me understand the intricacies
of long-term care."
The company offers free reviews of existing policies. Gordon said
that by advising some people to keep their policies, he might miss out
on the opportunity to make a commission on that one sale. But those
people then recommend Maga to others, so honesty pays off in the long
run, he said.
Gordon, now 62, has no plans to retire any time soon, although he did
reduce his role after a stroke in 2000. He's optimistic about Maga's
prospects at a time of surging health-care demand. "It's just going to
get better," he said.
