FOR IMMEDIATE RELEASE
AMERICANS EXPECTING FAMILY AND FRIENDS, NOT SAVINGS OR INSURANCE, TO PROVIDE FOR THEIR LONG-TERM CARE NEEDS
New LIFE Foundation Survey Shows that Adults Are Confused And Financially Unprepared to Pay for Long-Term Care
Washington, D.C. ‘ November 8 ‘ Mom‘s tender loving care may be a comforting thought when you‘re sick for a few days, but would your mindset change if you needed help for several years instead? Apparently not, according to a new survey by the Life and Health Insurance Foundation for Education (LIFE). Nearly four in ten Americans say they would turn to family and friends if they were ever to need long-term care services, compared to relatively few who say they plan to rely on insurance or private savings.
Conducted by KRC Research between October 27-30, the survey asked 1,025 adult Americans what they would rely on most if they were ever to become unable to handle some of the basic tasks of daily living, such as bathing, eating and dressing themselves. Here‘s how the public responded:
Family and friends 39%
Health insurance 18%
Long-term care insurance 15%
Accumulated savings 12%
Government assistance/programs 12%
Deb Newman, CLU, ChFC, LTCP, president of Newman Long Term Care and a member of the Board of the LIFE Foundation, says these results illustrate that many Americans have no plan when it comes to long-term care.
"No one wants to burden their loved ones when they can no longer take care of themselves, but that's precisely what many Americans think will happen to them because they aren‘t taking advantage of the planning options available," says Ms. Newman. "The chances of needing long-term care at some point in your life are greater than 50 percent, and yet very few people are prepared financially so that they won‘t have to fall back on their family."
Continues Ms. Newman, "The fact that more Americans say they would rely on health insurance than long-term care insurance to provide for their long-term care needs also shows that many people are confused about what long-term care insurance is all about. Health insurance won't pay for daily assistance with things like bathing, eating, or getting in and out of bed."
When asked what the significant components of their retirement plans are, overwhelmingly Americans were slightly more than twice as likely to rank most planning components higher than long-term care insurance. The public responded:
Social Security 72%
401(K) and other retirement savings plans 71%
Individual savings accounts 70%
Home equity 67%
Life insurance 61%
Long-term care insurance 33%
"One of the main reasons people purchase long-term care insurance is to preserve their retirement assets, so it‘s surprising to see that so many Americans don't value it on par with other planning components," says Newman. "Costs for long-term care services are only getting higher, so do your homework and take action now while you‘re healthy and coverage is affordable."
To help people understand the important role of long-term care insurance, LIFE reviews some of the common misconceptions people have regarding funding sources for long-term care:
- Health Insurance ‘ Typically, health insurance only covers doctor and hospital bills and a portion of your prescription costs. Health insurance will not provide coverage for any care that you may need outside the hospital, such as home health aides and nurses, home-delivered meals or stays at nursing homes or other assisted living facilities.
- Medicare ‘ Medicare is a government-sponsored health insurance program for people 65 and older. It only covers short-term rehabilitation care after you have been hospitalized for at least three days, are homebound under a physician‘s care or have been certified by a doctor that you have 6 months or less to live.
- Medicaid ‘ Medicaid does pay for long-term care services, but for those with very limited assets, who fall within their state‘s determined poverty level.
- Social Security ‘ While the Social Security Administration recently announced that it will increase payouts 3.3 percent next year, on average, most people receive just over $800 a month in benefits. In fact, the maximum benefit you will be able to receive retiring at your full retirement age will be just $2,116 a month starting next year. Is that amount enough to maintain your standard of living and pay for expensive long-term care costs?
LIFE released these survey results to coincide with Long-Term Care Insurance Awareness Week, taking place November 5-11. The survey polled a nationally representative sample of 1,025 adults, ages 18 and over via telephone and has a margin of error of +/- 3.1% at the 95% confidence level. Throughout November, LIFE will feature information about long-term care insurance on its web site, www.life-line.org, and recommends that consumers meet with a qualified insurance professional for assistance in identifying the right solutions for their specific needs.
The Life and Health Insurance Foundation for Education (LIFE) was founded 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.life-line.org.
About Long-Term Care Awareness Week
November 5-11, is Long-Term Care Awareness Week, an annual event sponsored by the American Association for Long-Term Care Insurance (AALTCI) and supported by the LIFE Foundation. The goal is to get people thinking about the need for long-term care and the importance of planning options available to Americans and their families.