Shorting long-term care

Although most adults agree that the recession has necessitated new long-term financial plans, they continue to ignore long-term-care insurance.
MAR 08, 2012
Just 7% of Americans said that they have added LTC insurance to their financial plans since the recession began, despite feeling more vulnerable financially, according to a study conducted by Genworth Financial Inc. The insurer interviewed 1,073 adults 25 and older with annual income of at least $50,000 and found that less than half (38%) think that they one day will need long-term care. Statistics suggest, however, that most Americans will require some type of long-term care during their lifetime. Of those who did purchase a LTC policy, half did so less than five months before being affected by a life-altering event. “People are burying their heads in the sand when it comes to long-term care,” said Wendy Boglioli, national LTC spokeswoman for Genworth. “The fact of the matter is, 43% of people will need long-term care before the age of 65, and the cost of health care is only rising.” When it comes to discussing LTC options, 75% of the respondents said that they hadn't broached the topic over the last year with loved ones, much less a financial adviser. Even though many people think that they will have to take care of a friend or family member within the next five years, 70% said that they wouldn't know what to do if a loved one were to require immediate long-term care. Those who purchased LTC policies cited reaching a certain age (35%), adviser recommendations (20%) and knowing someone who experienced a sudden event (19%) as the top three reasons that they acquired LTC insurance. “Advisers have an incredible power to plan all avenues of their client's financial lives and can play a critical role in making sure people are educated and making the right decisions when it comes to long-term planning,” Ms. Boglioli said. “It's a conversation more advisers need to have.”

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