Let’s Clear up Some Misunderstandings
– By Rosemarie Hurley, Certified Senior Advisor –
If long-term care insurance is such a good idea then why aren’t more people insured? Industry experts have been grappling with this question for over 10 years. And even though the number of policies purchased in 2008 to 7.2 million from 5 million in 2004, those numbers overall are very small when compared with the numbers of people who will need it.
For some time now one of the reasons for the slow participation has been about misunderstanding. When these plans were first introduced into the marketplace, they were covering only nursing homes and had rigid policy language. However, over the last 20 years, much of the criticism has dwindled because the insurance companies have made the policies much more “consumer friendly”. They now pay benefits for Home Care including things like Companion Services, as well as Adult Day Care, Assisted Living Facilities, Respite Care, Home Modifications, and more.
Another reason for slower participation is the lack of public awareness and the actual financing of long-term care. A nationwide AARP study conducted in 2007 to assess public awareness of Long-Term Care costs confirmed that Americans don’t understand the situation. Only 15% surveyed were able to estimate the national average monthly cost for nursing homes. 51% guessed significantly less than the actual amount which is $4,654. They similarly underestimated the cost for Assisted Living Facilities and Home health care costs.
Ignorance of who will pay for long-term care is just as great. In the same AARP study, nearly one-third of those surveyed wrongly thought they had insurance that would pay for LTC. A similar inconsistency exists between those who think that Medicare covers the costs of LTC. It actually pays for very little.
Lastly, the biggest factor in why people do not purchase Long-Term Care insurance is DENIAL. People have a natural tendency to deny, avoid, and procrastinate about decisions they find unpleasant to think about.
Company products are now addressing the question…..what happens if I do not use the policy? There are riders that will pay back premiums paid to a beneficiary at death. There are products that have a built in life insurance policy that returns all premiums. There are even some “graded premium refunding riders” that are very affordable and also provide the same peace of mind.
The need for Long-Term Care insurance is real. The ‘lion-share” of the cost for care will be out-of-pocket, and the plans are very flexible and affordable for most people. Americans who understand that long-term care planning is necessary can act to protect their accumulated assets and maximize their options for choosing care.
Rosemarie Hurley, president of Senior Insurance Solutions, has worked in the senior healthcare market for 22 years. She is a Certified Senior Advisor and has been a Long-Term Care Insurance Specialist for over 18 years. As a Broker, she represents only the every insurance company in the industry. Call her at: 274-6678 or visit the web site: www.longtermcareinsurance-online.com