the finance of longevity

Majority of Consumers Nearing or in Retirement Have Not Planned for Long-Term Care

Study underscores the need for planning and understanding of options

RADNOR, Pa, October 31, 2016 — /BUSINESS WIRE/ — The majority of people approaching retirement or in retirement, who should be planning for potential long-term care needs, have not taken the necessary actions to properly prepare for an unanticipated long-term care event, and the potential financial impact it may pose to families.

This information is according to the results of Lincoln Financial Group’s “2016 Long-Term Care Awareness Study,” conducted by Zeldis Research.

The Lincoln study surveyed 500 people between the ages of 40-70, and found that of those with a financial advisor, only 45 percent have discussed long-term care with their advisor, and only few were aware of the wide range of solutions available to help address the potential financial impact of long-term care.

“More than one in two people turning 65 are expected to need long-term care in their lifetime1, yet our research finds that those in their prime planning years are either not planning at all, or overlooking many of the options available in the market today that can address both long-term care expenses and other financial priorities,” said Mike Hamilton, vice president, MoneyGuard Product Management, Lincoln Financial Group. “Long-term care can be an uncomfortable topic to discuss, but proper planning and understanding of the funding options available can make the difference in maintaining control of the care you receive, protecting your savings and assets, and easing the impact on loved ones if those unfortunate circumstances arise in the future.”

Know the Options

The Lincoln research shows that among those who have spoken with a financial advisor about long-term care, the most common resource discussed for addressing potential long-term care expenses is long-term care insurance (82%). Retirement savings are the second most common resource (61%), which if used to cover expenses, can have a lasting negative impact on a surviving spouse or legacy plans. It’s estimated a consumer turning 65 today will incur on average $266,000 in long-term services and support costs, should they require future formal care, not accounting for inflation1. Among the least discussed resources identified by the survey are hybrid products that combine long-term care benefits with a life insurance policy or an annuity. Hybrid products are rapidly gaining traction in the market and today outsell traditional long-term care insurance products, according to LIMRA.

While only 28 percent of those surveyed stated that they own a financial product that can help address potential long-term care expenses, the top reasons for purchasing the product were to avoid depleting assets and for peace of mind, each cited by 92 percent of product owners respectively, followed by the desire to get the care one needs (86%).

Overcome the Barriers

The study found that the primary barriers for purchasing a financial product to cover long-term care expenses are competing financial priorities and concerns over paying for something that may never be used – each reason cited by 57 percent of respondents. While some types of long-term care coverage products are ‘use it or lose it,’ many hybrid products available in the market today provide a benefit whether or not care is ever needed.

“As we head into Long-Term Care Awareness Month, it’s a perfect time for those who have not planned for potential care needs to begin conversations with their family and financial advisor,” said Andrew Bucklee, head of Insurance Solutions Distribution, Lincoln Financial Distributors. “During these discussions, it’s critical that advisors help their clients identify their care preferences and other potential needs, while ensuring they understand the differences between the many types of financial solutions available and the distinct advantages of each when building a tailored strategy that includes the right mix of solutions.”

As we head into Long-Term Care Awareness Month, it’s a perfect time for those who have not planned for potential care needs to begin conversations with their family and financial advisor.

Thorough long-term care planning can help alleviate many of the top financial concerns of those surveyed, which ranked in order:

  • Healthcare Expenses (62%)
  • Retirement Planning – having enough to live comfortably (59%)
  • Value of investments declining (58%)
  • Costs associated with nursing home or adult day care (54%)
  • Outliving Money/Longevity (48%)

A key component of long-term care planning is understanding the potential costs associated with the types of care one might need based on their state. Consumers and advisors can visit Lincoln Financial Group’s What Care Costs website to learn more about state-by-state costs of Skilled Nursing Homes, Home Health Aides and Assisted Living Facilities. Enter the sponsor code ‘Lincoln’ in the upper right corner to get started.

For additional findings from Lincoln’s “2016 Long-Term Awareness Study,” please view this presentation at Lincoln’s website.




2016 Lincoln Long Term Care Awareness Study
The 2016 Lincoln Long Term Care Awareness Study was designed to understand attitudes and behaviors related to long-term care among those approaching or in retirement. The research was conducted from July-September 2016, across the United States among 500 adults between the ages of 40-70 with a household income of $150,000 or more and investable assets of $200,000 or more (ages 40-59), or a household income of $150,000 or more and investable assets of $300,000 or more (ages 60-70). Those surveyed were selected based on having at least some familiarity of long-term care.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help empower Americans to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $223 billion in assets under management as of June 30, 2016. Learn more here. Find us on Facebook, Twitter, LinkedIn and YouTube. To sign up for email alerts, please visit our Newsroom.
About Lincoln Financial Distributors
Lincoln Financial Distributors, Inc. (LFD), the wholesale distribution business of Lincoln Financial Group (LFG), provides expertise and access to a range of solutions that help advisors protect wealth and deliver outcomes for their clients. Lincoln’s broad portfolio includes innovative annuity, life insurance and retirement solutions that focus on addressing issues related to taxes, healthcare, longevity, inflation and market volatility. LFD comprises seasoned financial professionals who distribute Lincoln products through licensed insurance agents, registered broker-dealers, and other financial services intermediaries. Affiliates are separately responsible for their own financial and contractual obligations.
Long-Term Services and Supports for Older Americans: Risk and Financing, Department of Health and Human Services, February 2016