Survey Finds People Realize Cost of Long-Term Care Services Is High and Chance of Needing Care is Great
ARLINGTON, Va., Nov. 15, 2011 /PRNewswire/ -- The nonprofit LIFE Foundation today released the results of a new Long-Term Care Insurance survey showing that Americans understand many important facts regarding the cost of long-term care and likelihood of needing care. That's the good news. The bad news is that people aren't taking that knowledge and turning it into action in the form of long-term care insurance purchases. According to the American Association of Long Term Care Insurance, only about 8 million Americans have long-term care insurance. There are roughly 100 million Americans ages 50 and older, the subset of the population for which long-term care insurance is most needed. The US Department of Health and Human Services estimates that nearly 70 percent of people over 65 will need long-term care services at some point in their lives.
"If you knew that you had a 70 percent chance of winning the lottery, you'd probably buy a bunch of tickets," said Deb Newman, CLU, ChFC, LTCP, Chair-Elect of the LIFE Foundation. "While it's not a perfect analogy, Americans seem to be aware that there's a significant chance that they'll need long-term care assistance at some point, and yet hardly anyone is buying long-term care insurance. Something is wrong with this picture."
The LIFE survey tested how knowledgeable 1,000 adults were about key facts surrounding long-term care realities and found that most have a high awareness about the factors that contribute to the need for long-term care insurance.
Chance of Needing Care is Significant – A majority of survey respondents (71%) think 50-80 percent of today's 65-year-olds will need long-term care services at some point in their lives. "Americans really seem to understand that the chance of needing long-term care services is significant, which is why it's frustrating to see how few are financially prepared. Long-term care insurance is one of the best ways to guarantee that you'll get the care you need if one day you're no longer able to care for yourself," said Newman.
The Cost of Care is High – Nearly two thirds of adults (65%) believe that the annual cost of a private room in a nursing home in the U.S. is between $58,000 and $88,000, with the actual cost being $78,000 according to a recent industry report(1). "Most of us would quickly get wiped out financially if we had to come up with $70,000 or $80,000 every year for home care, nursing home care or an assisted living facility. Long-term care insurance helps ensure that you'll get the care you need, without wiping out your life's savings," said Newman.
Care Will be Needed for Years Not Months – When long-term care services are needed, nearly three in four adults (74%) believe the average duration of care will be three years or longer. According to the US Department of Health and Human Services, the average length of time that care is required is three years(2). "People recognize that when care is needed it could be needed for quite some time. With long-term care insurance you don't have to worry about putting that burden on family members and loved ones," said Newman.
In support of Long-Term Care Insurance Awareness Month in November, LIFE answers three common questions about long-term care insurance to help people evaluate their buying options.
- When is the Best Time to Buy? More than seventy percent of respondents to the LIFE survey (72%) were correct in thinking the average age of someone who purchases long-term care insurance is somewhere between the mid 40's and the mid 60's. In fact, 76 percent of all long-term care insurance purchases are made between ages 45 and 64(3). The average age of a person buying an individual long-term care insurance policy is 57, according to the American Association for Long-Term Care Insurance. "It's smart to buy long-term care insurance when you're in your 40's or 50's because the younger you are, the better your health will be and that can save you a lot of money on your premiums," said Newman.
- What Types of Care are Covered? The LIFE survey indicates that Americans understand that long-term care is provided in a variety of settings ranging from care delivered at home to services provided in an assisted living facility or nursing home. Long-term care insurance will pay for care offered in any of these settings, providing consumers with maximum flexibility.
- Where Can I Get Help? Long-term care insurance options can be complicated, so it is important to meet with a qualified insurance professional specializing in long-term care insurance who can guide you through the buying process. For more information about long-term care insurance, including a downloadable resource guide, visit: www.lifehappens.org/longtermcare.
The LIFE Long Term Care Insurance survey was conducted by Kelton Research between Oct. 26 and Nov. 2, 2011. The survey polled a nationally representative sample of 1,000 Americans, ages 18 and older, using an online questionnaire and has a margin of error of +/- 3.1 percent.
The Life and Health Insurance Foundation for Education (LIFE) was founded in 1994 in response to the public's growing need for information and education on life, health, disability and long-term care insurance. LIFE also seeks to remind people of the important role insurance professionals perform in helping families, businesses and individuals find the insurance products that best fit their needs. To learn more about these topics, please visit www.lifehappens.org.
(1) Genworth Financial Cost of Care Survey, 2011
(2) National Clearing House for Long-Term Care Information
(3) American Association for Long-Term Care Insurance
SOURCE The Life and Health Foundation for Education (LIFE)