Recent Study Reveals Consumers Are Underprepared for a Long-Term Care Event
INDIANAPOLIS (Nov 3, 2022) — The pandemic has heightened consumer awareness of the need for life insurance, but it hasn’t had the same impact on long-term care planning, according to new research from a 2022 OneAmerica consumer study on long-term care. Only 15% say the pandemic has had a big influence on their perception of long-term care needs, the range of personal assistance, and the services people need over a long period of time due to chronic illness or a disability.
OneAmerica collaborated with Hanover Research to survey more than 1,000 consumers about their perceptions and behaviors related to long-term care (LTC) planning. The LTC survey identified consumers’ understanding and outlook on cost, readiness and confidence to implement an LTC plan, as well as their preference for asset-based long-term care protection , and that influences their decisions about LTC. OneAmerica’s survey results mean that SLD is not a priority for most consumers. This finding is all the more important as November is National Long Term Care Awareness Month.
A large majority of consumers have not researched SLD protection options, despite the high likelihood that they will need them.
According to the Administration for Community Living, it is estimated that nearly 70% of individuals¹ people over the age of 65 will need some form of long-term care service at some point in their lives. However, the recent OneAmerica survey shows that few consumers have an LTC plan in place, and only 16% have implemented an LTC plan. Although 84% of consumers express at least a slight confidence in their LTC plan, only 29% have researched options around LTC.
Less than half of respondents have worked with a financial professional on a retirement strategy. Among those who have, long-term care remains a low priority compared to personal savings and debt elimination. Most consumers are unsure of the likelihood that they will ever need long-term care and have therefore not taken the appropriate steps to prepare.
“The results of this study clearly show that consumers need help from the financial services industry to better understand long-term care,” said Jeff Levin, vice president and head of distribution for Care Solutions at OneAmerica. . “Consumers have misconceptions about long-term care that financial services professionals are uniquely positioned to address in order to help them be protected and prepared.”
Consumers need to consider various financial factors and product offerings, as well as the people who influence their decisions.
Most consumers view the cost of long-term care as a barrier, but they may not be properly assessing the impact of the lack of long-term care protection on their long-term financial strategy. With 53% of consumers citing cost as the main barrier to purchase and 34% unsure if they would use it, consumers are prioritizing other financial goals. Consumers place the highest importance on saving enough money for retirement (86%), eliminating debt (74%) and having sufficient emergency funds (68%). While these are important goals, postponing the purchase of LTC protection can be costly as premiums rise. In addition, people run the risk of becoming uninsurable.
Although consumers are slow to implement a plan, they tend to be attracted to the features provided by SLD. They are particularly attracted to asset-based long-term care protection, which involves paying a benefit even if the care is not necessary. Of the 25% who were aware of asset-based LTC protection, consumers preferred its benefits over traditional LTC due to premiums not increasing (94%), tax-free benefits (92%), benefits unchanged (90%) and the possibility of passing it on to their family (84%).
“Consumers familiar with asset-based SLD protection recognize its benefits,” Levin said. “Protection provides valuable benefits, whether it’s needed, and it’s an effective way to create greater efficiency, while maintaining access and control over money and care.”
The survey results also indicate that family is very influential in people’s decisions about LTC. Consumers revealed they trust family members the most, with 52% relying on the experience of a family or friend as a source of familiarity. After family members, consumers trust financial services professionals (40%) and doctors (39%) the most. The main motivation for purchasing LTC insurance is to ease the financial burden on one’s family (66%), thereby increasing the family’s influence on LTC decisions.
Learn more on how consumers perceive long-term care and download the full consumer survey.
1 “How Much Care Will You Need?” 02/18/2020. https://acl.gov/ltc/basic-needs/how-much-care-will-you-need
The OneAmerica Long-Term Care Consumer Market Study was administered in association with Hanover Research and distributed online to professionals recruited through a third-party panel provider. This analysis includes 978 respondents, after data cleaning and quality control. Respondents were at least 40 years old and currently planning for the “retirement era” of their lives. Individuals, or anyone in their immediate family, did not work in the insurance industry. Hanover Research is not a subsidiary of the OneAmerica companies.
A national provider of insurance and financial services for more than 140 years, OneAmerica companies help customers build and protect their financial future. OneAmerica offers a variety of products and services to meet the financial needs of its policyholders and customers. These products include pension plan products and recordkeeping services, individual life insurance, annuities, asset-based long-term care solutions and employee benefit plan products. Products are issued and underwritten by OneAmerica companies and distributed through a nationwide network of employees, agents, brokers and other sources who are committed to delivering value to our customers. To learn more about our products, services and OneAmerica companies, visit oneamerica.com/about-us/companies-of-oneamerica.
OneAmerica is the trading name of the OneAmerica companies.
Jonathan D. Neal
Public Relations Manager