NEW YORK - Financial advisers trying to convince clients to purchase long-term-care insurance are learning what mothers have known all along: Guilt can be an effective form of persuasion.
More than two-fifths of respondents to a survey by Mutual of Omaha Insurance Co. in Nebraska this month said that the prime reason for buying LTC insurance was to avoid being a burden on their family.
"Many of today's retirees have had the experience of caring for a parent or have dealt with placing a parent in a nursing home," said James Blackledge, senior vice president of Mutual of Omaha. "They don't want their children to face those same burdens."
But family also can be a security blanket that causes some people to reject LTC insurance, according to the Life and Health Insurance Foundation for Education in Washington. "My family will take care of me" was a top-five excuse used by people who hadn't purchased the coverage, LIFE research found.
The other top excuses were: premiums are too high; a belief that the insurance won't be needed; thinking that health insurance, Medicare or Medicaid will cover all or most LTC expenses; and the impression that the buying process is too complex.
"Most people don't want to depend on their children to care for them for the long term," said Deb Newman, a LIFE board member and president of Newman Long Term Care in Bloomington, Minn. But that can be exactly what happens if excuses delay or prevent pulling the insurance-purchasing trigger, she noted.
How a client feels about the potential to eat into family resources to pay LTC expenses is among the factors considered in the insurance-buying process, according to Adam Leavitt, a fee-only financial planner with Red Rock Financial Advisory LLC in Tulsa, Okla.
The effect family has on the "to buy or not to buy" decision is "generational," Ms. Newman said. People in their 60s oftentimes have a "my kids owe me that" attitude, she noted.
That can result from their having recently retired, and instead of enjoying their free time, they are busy taking care of their own parents, who are probably in their 80s, Ms. Newman added.
"But that's often just a first reaction, a smoke screen, that we answer by showing them how unrealistic it is," she said. Even adult children who say they want to take care of their parents don't realize what an enormous commitment it is in terms of emotion, physical exertion, time and money, Ms. Newman added.
"We focus on people in their 40s and 50s, who want their kids to have every opportunity and don't say they want the kids to take care of them," she said. Even though this generation probably just finished paying for their kids' college education, they don't have the "they owe me" mentality, Ms. Newman noted.
Long-term care often is an emotional family issue, especially if clients see their parents pay $50,000 or more a year for a nursing home, added Lynn Devitt, an insurance agent with Newman Long Term Care.
She often mentions to clients how much better it would be to give that money to children and grandchildren instead of spending it on providing care for themselves.
Since avoiding family burdens is a prime driver of LTC planning, it isn't surprising that making those decisions is becoming a family affair.
About two-thirds of the respondents to the Mutual of Omaha survey said that they had discussed long-term care with their family, and more than half had had a family member involved in their decision to buy LTC insurance.
With Medicare's limitations and the need to protect assets, the family has a vested interest in those decisions, Mr. Blackledge noted.
"We make LTC insurance part of retirement planning," Ms. Newman said. "It's like a gift they are giving to their kids - not having to take care of elderly parents."