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Long-term care poses the single largest financial risk to Americans living on retirement savings and income according to the American Association for Long-Term Care Insurance, the industry trade group. Yet, few consumers have the facts correct when it comes to understanding available planning options.
"This is the first generation of Americans where living into your 80s, 90s and beyond is becoming commonplace," explains Jesse Slome, director of the Association. "When you live a long-life you are far more likely to need long-term care which is not covered by health plans or government programs beyond a few days."
Exprerts concur that as the U.S. population ages, the percentage of people older than 65 will increase from about 13% in 2009 to 20% in 2040. Part of the projected increase is due to an increased life expectancy beyond age 65. After retirement health insurance and Medicare provide very little long-term care benefit, if any, according to financial planning professionals.
"A failure to plan for long-term care prior to turning 60 is a huge mistake," Slome notes. "You can't start a retirement savings plan at age 60 and you shouldn't wait until retirement to investiage long-term care options." Insurance industry executives explain that individuals must health qualify for coverage and that changes in health as one ages can make securing protection costly or impossible.
The results of a just-released national study of individuals between 40 and 70 revealed that less than four in ten adults (36%) know that 60-to-70 percent of 65-year-olds will require long-term care services at some point in their lives. Just over one-third knew that most long-term care services are received at home. While the number of respondents answering correctly (37%) increased since the 2004 survey (18%), awareness is low overall.
Few participants in the survey reported that they are taking action to protect themselves from such potentially catastrophic expenses; only 18% know long-term care insurance rates are based on age, but almost nine in ten (87%) are aware that a comprehensive long-term care policy covers home, assisted living and nursing home care.
"Because this is the first generation purchasing long-term care insurance in large numbers, few know what protection costs or ways to make policies affordable," Slome adds. The Association offers a free online guide "Reducing the Cost Of Long-Term Care Insurance" which is accessble on the organization's website.
Click here to read the guide. No sign-in information is required.
Written by Mindy Hartman
Los Angeles, CA
Exclusive to HULIQ.com
Posted October 11th, 2009 by Mindy Hartman
