RADNOR, Pa.--(BUSINESS WIRE)--A study of consumers and financial advisors released today by Lincoln Financial Group finds there is confusion among most Americans about long-term care, including who is at risk, the cost of long-term care, how it will be covered, and who will provide this care if needed.
“Long-term care planning is increasing in importance by the day with more and more people approaching or in retirement, and living longer,” said Bill Nash, VP of MoneyGuard Distribution, Lincoln Financial Distributors. “Being proactive before care is needed can make a lasting impact on the quality of care you receive, the ability to maintain dignity, and on your family’s financial security.”
Long-Term Care Misconceptions
According to the study, only a third of people believe they will need long-term care in their lifetime, often leading to reluctance to plan appropriately. However, the Department of Health and Human Services estimates more than one in two people turning 65 will need some form of long-term care in their lifetime.
Consumers surveyed estimated the annual cost of nursing home care at $54,000, when in reality, national averages for a private room are in excess of $100,000.
Most people surveyed believe they would pay for care through Medicare or health insurance, however these options only cover very limited and specific types of long-term care. The second most cited source to pay for long-term care was personal savings and assets, yet only a third of consumers felt confident of having the financial resources to pay for long-term care.
“Comprehensive planning should include meaningful discussions with both family members and a financial professional together to understand the realities and risks of long-term care, lay out care preferences, and assess care options and how they would be paid for care,” continued Nash.
Nearly all financial advisors surveyed agreed, families should discuss plans for long-term care before they actually need it, ideally around age 50. However, 93 percent of advisors said consumers are not sufficiently planning for long-term care needs. That outlook was supported by the study’s consumer findings around planning: only 52 percent of people said they have spoken with their spouse about who would provide care, 35 percent have spoken with their parents, and just 29 percent with their children. In each case, even fewer have discussed how such care would be paid for.
Long-Term Care Funding Options
The survey found 93 percent of advisors believe it is smart for clients to a have long-term care insurance solution. The advisors estimate clients without a long-term care insurance solution can spend their savings two-to-three times faster than expected if long-term care is needed.
Today there are many different types of long-term care funding solutions available in the market that can help mitigate the costs of care events, allowing a client to select a solution that fits their specific care and financial needs. Solutions available in the market, in addition to long-term care insurance, include hybrid life insurance/long-term care products, and riders that can be added to annuity and life insurance products.
For more information, including a comprehensive report of study findings, click here.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help empower people to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $253 billion in assets under management as of December 31, 2017. Lincoln Financial Group is a committed corporate citizen and was named one of the Forbes Best Employers for 2017, is a member of the Dow Jones Sustainability Index North America, and received a perfect score of 100 percent on the 2018 Corporate Equality Index. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.
The Lincoln Financial Group Long-Term Care Study
Results of the Long-Term Care Study are based on two online surveys - one among 1,012 consumers, and one among 500 financial advisors – conducted by Versta Research on behalf of Lincoln Financial Group between August 28 - September 22, 2017. The surveys focused on long-term care attitudes, experiences, and planning. For additional background information on this study, please click here.