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Montevideo American-News - Montevideo, MN
  • Thrivent Financial for Lutherans’ survey shows barriers still exist as Americans consider long-term care insurance

  • A recent nationwide omnibus survey of 1,005 American adults shows although knowledge about long-term care insurance is increasing, barriers are still in place that are preventing purchase.
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  • A recent nationwide omnibus survey of 1,005 American adults shows although knowledge about long-term care insurance is increasing, barriers are still in place that are preventing purchase. Both the perceived high cost and a lack of awareness about coverage were common themes voiced by Americans as they answered questions about long-term care planning in the Thrivent Financial for Lutherans survey.
     
    Consider this: life expectancy is increasing; medical technology continues to improve; baby boomers are beginning to retire. All of these issues create a perfect storm for the probability of needing long-term care, but many Americans aren’t prepared for the costs – and that’s where long-term care insurance could come into play.
     
    The costs for long-term care are staggering. According to the American Association of Long-Term Care Insurance, the average annual cost of full-time nursing home care is $76,285 for a semi-private room. Based on the average hourly rate of $21 per hour for a home health aide, eight hours of care a day is $61,320 annually.
     
    Those figures should motivate Americans to begin planning for long-term care, but Thrivent Financial’s survey indicated that more than half of the population is still not even aware of what long-term care insurance covers.
    · 24% of respondents say they are well-educated on the topic.
    · 52% of respondents say they’ve heard about long-term care insurance, but don’t know the specifics about what it covers.
    · 25% of respondents had no knowledge about what long-term care insurance covers.
     
    Wisdom of the ages?
    Surprisingly, the younger generation seems to have a better grasp on the importance on preparing for long-term care. When asked about their current long-term care insurance ownership, as well as future plans for purchasing if it is not currently owned, 18-34 year olds answered as follows:
    · 15% said they currently own long-term care insurance.
    · 41% said they don’t currently own long-term care insurance, but they plan to in the future.
    · 44% said they don’t currently own long-term care insurance, and they don’t plan to purchase it in the future.
     
    For the 35-54 year olds, the results showed:
    · 15% of 35-54 year olds said they currently own long-term care insurance.
    · 25% of 35-54 year olds said they don’t currently own long-term care insurance, but they plan to in the future.
    · 60% of 35-54 year olds said they don’t currently own long-term care insurance, and they don’t plan to purchase it in the future.
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    Finally, for those ages 55 and up, the results showed:
    · 17% of those ages 55+ said they currently own long-term care insurance.
    · 17% of those ages 55+ said they don’t currently own long-term care insurance, but they plan to in the future.
    · 66% of those ages 55+ said they don’t currently own long-term care insurance, and they don’t plan to purchase it in the future.
     
    Barriers to purchasing long-term care insurance
    The Thrivent Financial survey asked respondents to identify reasons for not purchasing long-term care insurance. The responses indicated:
    · 51% of respondents thought long-term care insurance is too expensive.
    · 24% of respondents didn’t know what long-term care insurance was.
    · 10% of respondents said it didn’t apply to them and that they could pay on their own.
    · 8% of respondents didn’t believe the provider of the long-term care insurance would pay.
    · 7% of respondents said they won’t need it because they have family members that will care for them and help pay for care.
     
    If a 50-year-old person purchases a long-term care insurance policy with a monthly benefit of $5,000 for a 36-month period, the average cost would be about $1,050 annually.[2] If a person pays for the long-term care insurance for 20 years before eventually needing to use the policy, an amount of $21,000 would be paid in premiums. This cost is minimal compared to three-years of long-term care, either in a home setting or in a long-term care facility.
     
    “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.”
     
    So, when is the right time to purchase?
    Nearly two out of five respondents (36%) believe that the age of 50-65 is the appropriate time to start looking at purchasing long-term care insurance. 23% of men and 27% of women felt that long-term care insurance should be looked at in the 40-50 age range. Of interest, men (24%), more so than women (18%), feel that between the ages of 33-40 is a good age to start considering long-term care insurance.
     
    About the Thrivent Financial Long-Term Care Insurance Survey
    Data for this survey was collected via national omnibus survey by Ipsos. Interviewing took place between Aug. 31 and Sept. 4, 2012, among a national cross-section of 1,005 adults age 18+ of whom 49% were male and 51% were female. The margin of error is +/- 2.5%.

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