Survey Shows Americans Lack Overall Understanding of Long Term Care

October 29th, 2009 | by admin Published in MetLife, News, Reverse Mortgage | 7 Comments

Overall, Americans did not do well on a survey of their long-term care knowledge according to MetLife Mature Institute (MMI). According to a recent survey, most know what long-term care is and how much it costs, but their scores fall short regarding how many people will need it and how they will pay for it.

The MetLife Long-Term Care IQ Survey, taken by 1,021 individuals aged 40 to 70 in 2009, compared results with a similar 2004 study. The respondents’ overall score was 52%, unchanged since 2004; and only 21% scored 70% or higher.

The study reveals that most are not taking appropriate steps to protect themselves from potentially catastrophic expenses. According to the study:

Just about four in ten (36%) know that 60% – 70% of 65-year-olds will require long-term care services at some point in their lives.
Just over one-third know that most long-term care services are received at home. While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.
Older people (over 60) are more knowledgeable about long-term care than younger people (40 to 49).
Fewer than half (45%) are aware that one in five American households care for an adult family member or loved one.
Few are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.

“While long-term care knowledge has increased in some areas since 2004, serious and potentially costly misconceptions remain,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute.

“Many middle-aged and older Americans fail to grasp long-term care’s fundamental concepts, setting the stage for difficulties in the future,” said Dr. Timmermann. “Still others mistakenly believe they will be covered by resources that do not pay for such care. And, there is the common misconception that ‘this won’t happen to me.’

“As people plan for retirement, they need to consider not only how much income and savings they will need to last a lifetime, but also how they would pay for ongoing care should they develop a chronic condition or serious illness,” said Dr. Timmermann.

Long-Term Care IQ: Removing Myths, Reinforcing Realities

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dduck12

Go, figure.
dduck12

OK, got the hook out now. A lot of senators besides McCarthy (oops) too. But, maybe her husband will read it to her at bedtime.
Boy, I wonder if the Met RM guys will be able to use the report or its derivative brochures? Handy to have Snoopy on your side. Maybe Met can get that provision that was mentioned in the original RMs that allowed, I forgot what, if you used RM proceeds for LTCI premiums. (Are legislators influenced by big corp. lobbyists?)
Travis De Renzo

You bring up a very interesting point about early legislative talk actually ENCOURAGING the use of Reverse Mortgage proceeds for the purchase of Long Term Care Insurance (LTCI).

I believe the incentive that was discussed was a refund of the upfront FHA Insurance fee for those that used any portion of the Reverse Mortgage proceeds to purchase a Qualified LTCI Policy.

Now, you hear uneducated law makers refer to LTCI as an "inappropriate use for Reverse Mortgage proceeds" (such as in the recent AARP E Street Segment), despite the lengthy studies by The George Washington University (D.C.), the White House Conference on Aging Reports and despite Common Sense.

Travis De Renzo
www.HECM.net
James_E_Veale_CPA_MBT

Mr. De Renzo,

Let's not rewrite history.

One of the last acts of President William Jefferson Clinton was to sign the American Homeownership and Economic Opportunity Act of 2000 (PL 106–569) into law on Dec. 27, 2000. Section 201(c) of that act was codified as 12 USC 1715z-20(l). Section 201(c) waived all upfront MIP if all of the available proceeds were used to purchase Long-Term Care insurance.

The measure was so inappropriate and ill-advised that HUD refused to implement it. To justify its position HUD authorized a study that was published in May 2003. You can read it at:

http://www.huduser.org/Publications/pdf/Actuari...

The MIP/LTCi provision was deleted from law by Section 2122(a)(6) of the Housing and Economic Recovery Act of 2008 (“HERA”, PL 110-289) which was enacted on July 30, 2008. It seems even Congress thought better of what it had done over seven years earlier. You can read 12 USC 1715z-20(l) as it existed before enactment of HERA at:

http://law.justia.com/us/codes/title12/12usc171...

You can read the HERA provision at:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc....

The value of LTCi can be argued by its proponents. What Congress enacted was hardly reasonable or responsible legislation. You may not agree with how HUD handled the matter but many believe what HUD did stopped a potential abuse and most likely stopped Congress from enacting similar legislation for other insurance and financial products.

Those in our industry, who are in the position to know such things, claim that the staff of Senator McCaskill reads the articles and comments in RMD regularly so here is a reminder to the Senator:

Senator McCaskill (D-MO), please remember it was NOT the reverse mortgage industry that legislated the inappropriate use of HECM proceeds; it was a Republican controlled Congress enabled by a Democratic President. It was HUD that stood up to Congress and the President and refused to implement it. HUD did the right thing.
The_Critic

This was like bait left on the end of a fishing hook. I am surprised it took so long for you to BITE.

You are right. I think one certain Senator needs to read these findings.
dduck12

I bet most lawmaker and regulators don't know this, or ignore it, as far as RMs go.

"Just over one-third know that most long-term care services are received at home. While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall."

Survey Shows Americans Lack Overall Understanding of Long Term Care

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