Although a long-term care insurance policy could be the difference between needing to enter a costly institutional care facility or being able to receive care at home, more than half of survey respondents said they haven’t bought a policy because it’s too expensive.
Because of the high costs of long-term care—the average annual cost of full-time skilled nursing care in a facility is more than $76,000 for a semiprivate room—industry trade group the American Association of Long-Term Care Insurance believes Americans should be motivated to begin planning for their future care needs.
However, a Thrivent Financial for Lutherans survey about long-term care planning conducted by Ipsos reveals that 51% of respondents think this kind of insurance is “too expensive,” while another 24% don’t even know what long-term care insurance is.
A quarter of respondents didn’t know about what long-term care insurance covers, and while more than half (52%) have heard about long-term care insurance, they weren’t aware of product specifics.
About 17% of survey respondents aged 55 and older said they currently own a long-term care insurance policy, and the same percentage indicate they plan to buy a policy in the future. However, the remaining 66% of respondents in that age group said they don’t currently own a policy and don’t plan to purchase one.
Younger demographics seem to have a better grasp on the importance of planning ahead for care needs. In both the 18-34 and 35-54 year old age groups, 15% said they currently own a long-term care insurance policy.
More than four in ten of the 18-34 year olds (41%) said that while they don’t currently have a policy, they plan to in the future. One-fourth of the 35-54 year olds said they, too, plan to buy long-term care insurance in the future.
As the boomers head toward retirement and lifespans keep growing, more people are expected to encounter ongoing care needs. About 70% of people aged 65 and older will need long-term care at some point in their lifetimes, according to the Department of Health and Human Services.
“We often hear that cost is an inhibitor to purchasing long-term care insurance,” said Dean Anderson, product leader at Thrivent Financial for Lutherans. “In reality, though, it is often a wise financial decision.”
Survey results aside, the long-term care insurance industry is facing an uncertain future, with some companies no longer offering the product, while one remaining major player, Genworth, was recently downgraded because of related risks.
Written by Alyssa Gerace