Three-Quarters of Americans Dragging Their Feet in Long-Term Care Prep

Even though many Americans are aware they will likely need long-term care down the road, many are dragging their feet when it comes to actually preparing for their future health requirements, shows Genworth’s 2011 Financial Reality Check Study.

Circumstances that triggered survey respondents to looking into buying a long-term care policy include knowing someone who experienced a serious illness or life-threatening event, being advised by a financial planner, or reaching a certain age.

For those who experienced these “life events,” it look less than five months for 52% of respondents to begin the purchase process.

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Nearly half of respondents believe they will end up giving care to friends or family, but 75% said they haven’t had a conversation about long-term care planning in the past year.

Despite many seniors’ retirement funds taking a hit thanks to the recession, 68% of those surveyed didn’t decide to create a new plan or increase the frequency with which they met with a financial professional since the financial crisis in 2008.

Just under 40% of Americans take time at least once per month to examine their financial situation, while a majority, at nearly 90%, do so at least once per year.

In terms of what people planned to add to their financial plans in the next two years, a majority 43% did not plan to add anything and chose none of the available options, which included a reverse mortgage (0%), long-term care insurance (7%), IRAs (17%), and 401(k)s (21%).

Less than half of respondents, at 38%, thought they were either somewhat or extremely likely to need long-term care one day. Reasons for those who said they didn’t need long-term care insurance ranged from being young and healthy, not being able to afford it, planning on their children to provide care, or feeling they wouldn’t live long enough to need long-term care.

Among those who do believe they need long-term care insurance, many cited security, personal experience with providing care to others, and not wanting to be a burden as reasons.

View the Genworth study here.

Written by Alyssa Gerace

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    • dduck12,

      Your comment is insulting.  

      Some of us do just that for our parents.  That may not happen in the Big Apple but it happens much more than you know south and west of NY Harbor.

      • What is insulting is your lack of experience in the LTC area.  Since in the past you have shown common sense, I will make my point clearer.
        When an adviser recommends LTCI to a client, there are sometimes excuses/objections for non-action (whether genuine or not, who knows, that is selling 101). 
        The one where people say they will rely on the kids is an insult and a financial/emotional problem for  the kids, especially  if they DO have the premium dollars.  Many FPs deal with this all the time and know from personal experience that the kids often wind up “taking care” of the parent for some times longer than they themselves were parented while trying to run their own lives (sometimes called the sandwich generation).  I know of several women with parents in their 90s and one over a hundred spending their money and time trying, and frequently flying, on how  to take care of their parent(s).  So, you may know RMs, but you know jack about LTC.  And that is  a remark from the Big Apple, like it or lump it.

      • dduck12,

        Wow!!  “What is insulting is your lack of experience in the LTC area.”  It seems my taking a breath on the same planet is an insult to you.  Since most of the humans living on this earth have less experience than I in the LTC area, they must also be insulting to you.

        dduck12, if that is your standard of what is insulting to you and what is not, then most of the Big Apple is insulting to you.  In the largest populations on earth (slightly bigger than the Big Apple), children help take care of their parents.  That is how life is for the vast majority on the earth.  You may laugh about it but that is the way the world has progressed, not as a result of LTCi.

        It is no wonder so much of the world actually does view us as the “Ugly American.”

      • dduck12,

        But you did reply!!

        I think LTCi can be a good thing for most of the more affluent in our society.  I question its value to those who have trouble balancing their monthly budgets due to increases in Medicare costs and low increases in their sole source of income, Social Security benefits.

        What is interesting is no health service provider (doctor or nurse), private senior case worker, income tax adviser, investment adviser, lawyer, HECM counseling agency exec, or financial adviser has ever initiated one conversation about LTCi unless they also sold non-casualty insurance.  Why do you think that is?

  • dduck12,

    Yes, and George W. Bush is no longer President but that does not mean he is still not promoting the same policies he did in the past or defending the actions of his administration.  Looking at my peers, most of their bias was formed years ago and has only hardened with age. 

    I do not believe that HECMs are for everyone and not just because they are not old enough, do not own a home, do not own the right type of property, or any similar issue.  For some people it is inherently wrong.  I believe the same is true with any product.

    You may thing this is crazy (and I do) but a friend who is worth close to $25 million through cash, real estate, and a business he owns will not buy life insurance.  He is in his late seventies and strongly believes that if he starts planning his estate, that will speed the day of his death. 

    The friend points to mutual friends and states that the one thing they all had in common was they had planned their estate.  When you argue that other friends have planned their estates and they are doing well, he points out the one thing that those who have passsed had in common was their estate planning.

    Some may think the guy is crazy but he is not.  In his early forties he took over the company he worked at, learned it well, found a way to buy it, and as a result still has a growing wealth base.  The anti-planning concept is as strong today as it was 25 years ago when I first him.  His wife, children, and serveral of his other friends try to appeal to his common sense but he tells us he values life more than money or the THINGS he can leave his heirs.  It is an interesting and very stubborn outlook. 
     

  • I think I agree with you.
    LI and RMs are just tools.  Our job as planners is not to fall in love with our hammers when a screwdriver will do a better job.
    BTW: the newest pitch in LI is that it should be viewed as another asset class.
    Personally, and this may be a big surprise, I love LI.

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