More American families are experiencing a parent or other family member who needs help with everyday activities as they have become older or suffered from health issues. This firsthand awareness of the financial costs and related burdens of aging has encouraged more people to purchase Long-Term Care Insurance, and they are doing so at much younger ages.
The American Association for Long-Term Care Insurance (AALTCI), a national consumer advocacy and education group, says that in 2019 more than half of LTC Insurance buyers are between ages 55 and 65. Eighty-two percent of the buyers were age 65 or younger.
Asset Protection - Not the Only Reason for LTC Planning
LTC Insurance is working for American families. In 2020 over $11.6 Billion was paid to families in Long-Term Care Insurance benefits. These benefits help provide care in any setting including inhome care.
"When I first started in the 'nursing home insurance' business in 1979, the average age was 74. Today we are down to the mid-50s and early 60s. Protecting assets and planning are the two motivators for the purchase of Long-Term Care Insurance," said George Mellendorf, CLTC LTCP, President of LTC Solutions, a brokerage specializing in long-term care planning.
A Mutual of Omaha study agrees with Mr. Mellendorf’s assessment. The research indicates the number one reason people purchase long-term health care coverage is to protect assets. While 23.6% of the buyers furnished that reason, most people have multiple reasons.
The same study shows 18.1% of the buyers wanted "peace-of-mind," and 17.1% noted they didn't want to be a burden on their family. Fifty-two percent had personal experience as a caregiver.
Craig Roers, who heads marketing at Newman Long-Term Care, has seen their clients' average age drop to 57. He says they have consumers even younger buying LTC Insurance even younger on a much more regular basis than in the past. The perception is changing around who should be looking into Long-Term Care Insurance.
"People are less often picturing the "The Golden Girls" in their retirement community and instead are picturing the cast of "Friends." Lisa Kudrow, who played Phoebe, is 57. Monica – Courtney Cox is 56. These are not "elderly" people," Roers said.
Most of Us Have Personal Experience
An LTC NEWS survey of leading Long-Term Care Insurance specialists shows that most consumers they speak with had some personal experience. Consumers see the consequences of long-term care firsthand with family members or others they know dealing with the physical, emotional, and financial impact of extended care.
Longevity is changing America and the world. Families find themselves in a crisis when no advance plan for long-term health care is in place. The burden of caregiving often gets placed on adult children. Paid care services will adversely impact income and drain savings. This has an adverse effect on lifestyle and legacy.
Roers says more people are becoming caregivers for family members. These people look to their future and don't want to place these burdens on their families. Whether they provide direct care, take loved ones to the doctor or other appointments or procedures, or manage paid care, the stress and anxiety are enormous.
"They are anticipating their own retirement in another 15-20 years, and they want to make sure that those plans are protected against the consequences of the biggest risks they may face once they are no longer working," he explains.
Better Health Care Means Greater Longevity
Roers says there are several unknown variables that people consider. Do they look at average risks or perhaps an extended need due to dementia? However, since lifespans are increasing due to better health care, we see more people need long-term care as they get older and older.
No matter if dependency is due to old age or some type of dementia, the consequences can be devastating on both family and finances.
George Mellendorf, President Of LTC Solutions, headquartered in Florida, says he has been in the industry since 1979. When he started, the average client age was 74. Today, he notes, it is in the mid-50s.
"Protecting assets and planning to avoid dependency are the two motivators for the purchase of Long-Term Care Insurance," Mellendorf said.
Mellendorf says medical science advances, including new drugs that treat chronic conditions, allow for greater lifespans. However, longevity increases the risk of dependency. People require long-term care services due to an illness, accident, or the impact of aging.
One example of medication advances is cholesterol medications. Mellendorf points to a 2008 study that showed a 54% reduction in heart attack risk and a 48% percent reduction in stroke risk. Those who used statins as preventive medicine had outstanding results that increase lifespan.
Guaranteed Tax-Free Benefits – Giving Access to Quality Care
Long-Term Care Insurance provides the guaranteed tax-free benefits that give people access to their choice of quality care. This care can be in-home care or in a facility. With the resources from a policy, the family has the time to be family. However, Long-Term Care Insurance is medically underwritten, so you can't delay until you have significant health issues to obtain coverage.
It is health that is, in part, driving people to purchase LTC Insurance well before they retire.
"If chronic conditions manifest themselves in their early 60s, they may become uninsurable. In addition to health, premiums a considerably lower as well as many more choices," Mellendorf said.
As we get older, we experience changes in our health. Roers points out that these changes can add to the cost of Long-Term Care Insurance or even make you ineligible for coverage completely.
Health Problems Can Prevent Coverage Approval
He points to a study published in Broker World Magazine that says one in five people in their 50s gets declined for LTC Insurance coverage because of their health. However, over half of the applicants get declined for coverage when you wait until your 70s to apply.
The cost of LTC Insurance is also much more affordable when you apply in your 40s or 50s. Long-Term Care Insurance can be very affordable at younger ages and when you still enjoy reasonably good health.
"Today's buyers are more health conscious – they are planning to live longer than previous generations. Medical advances mean that conditions that used to kill us might now be treated or even be recovered from. But the flip side of living longer is that we tend to become frail at some point and start to need assistance," Roers said.
It is About In-Home Care- Not Just Nursing Home
He says that consumers understand that long-term care is just not nursing home care. In fact, most claims for Long-Term Care Insurance are for in-home care. Policies are comprehensive and cover all types of care, either in-home or facilities, including assisted living.
"People are seeing the leading edge of the Baby Boomers grapple with long term care issues – some were well prepared, but many were not, and we are seeing families make major lifestyle changes to deal with a long term care crisis," he adds.
"I have been in the long-term care arena for 40 years. Over the year's insurance companies have expanded reimbursement for care in the desirable sites of care. Care at home or in an assisted living facility is much preferable over a nursing home," he said.
"Let's face it; most people having a difficult time visiting someone in a skilled nursing home, let alone imagine that they might end up in one on Medicaid," Mellendorf added.
Health Insurance and Medicareare Not LTC Solutions
Some people are still unaware that health insurance, including Medicareand supplement, do not pay for most long-term health care services. Medicaid, the medical welfare program, will pay for long-term care, but only if you have little or no assets.
Without advance planning, the family usually gets the responsibility. This creates stress and anxiety in addition to financial pressures. With Long-Term Care Insurance being so affordable for many people, especially when purchasing before retirement, you can not only safeguard income and assets but ease the stress otherwise placed on those you love.
You can research the financial impact of long-term care by using the LTC NEWS Cost of Care Calculator. You will see both the current and future cost of care services where you live. Click here to use the calculator.
The Ultimate Long-Term Care Guide is also a good resource to start your research. Experts suggest seeking a qualified Long-Term Care Insurance specialist to help you navigate the many available options and policy types. Most insurance agents and financial advisors lack experience in this area.
You can find a trusted and experienced specialist by clicking here.
Planning for long-term care is all about family. While aging issues are not fun to think about, planning is essential to peace-of-mind and will offer you choice and independence so you can enjoy quality care and protect your legacy.
About the Author
Linda is a freelance writer interested in retirement planning, health and aging.
Contributor since October 31st, 2017
LTC NEWS offers many resources to help people learn about retirement issues like long-term care, aging, health, caregiving, and more. Whether you are researching for yourself or an elderly parent, LTC NEWS is the place to start.
The reality of life is simple. Your health, body, and mind will change in the decades ahead. Prepare your family and finances for the financial costs and burdens of aging. For many American families, the affordable solution is Long-Term Care Insurance.
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