Baby Boomers Unprepared For Long Term Care Needs, A New Study Suggests
There is a lot of confusion surrounding preparation for long-term care needs among baby boomers, according to a study commissioned by the GE Center for Financial Learning, an Internet-based financial education resource run by GE Financial Assurance, Richmond, Va.
The study, “Secure Tomorrows Autonomy Today,” finds only 7% of baby boomers have an adequate plan in place. “The survey findings expose the tremendous amount of confusion among baby boomers about how to properly plan for long-term care needs,” says Dr. Christopher Hayes, an independent advisor of the GE Center, and co-director of the Center for Aging Research & Education, Southampton, N.Y. CARE conducted the study. “As the largest segment of the population heads toward retirement, this alarming lack of preparedness will lead to devastating consequences for our families and the nation.”
According to the STAT/CARE survey, boomers are postponing planning for long-term care needs in their old age.
Hayes indicates that high costs involved with long-term care plans, together with the lack of understanding and the lack of information available to them on the issue, stop baby boomers from preparing long-term care plans. “They understand they need to take some kind of action,” he notes. “They know they cant rely on their families or the government.” According to the survey, a majority of baby boomers (70%) believe that they need to be responsible for taking care of their own long-term care needs.
However, the issue that still needs to be addressed is how aging baby boomers will finance their long-term care plans. The survey finds that 75% have no idea how much long-term care insurance actually costs, with most overestimating the cost of premiums by more than 300%. Meanwhile, 71% fear not having enough financial resources for retirement, and 85% are highly concerned with maintaining control over care options and where they live.
Hayes notes that more education is needed to address baby boomers lack of preparation for their medical needs after retirement. “If they have more information, if the information is more understandable, plus if they get aware about very reasonable premiums they will pay when they buy the plans early enough,” he notes, “that might pull the trigger.”
The industry, says Hayes, should focus on younger ages. Although it varies depending on an individual, Hayes believe that anyone in his late 40s or early 50s should at least begin to consider ways to finance long-term care plans. However, he adds, “when people consider buying the plans in their late 40s or 50s, they dont receive the information they need.” This is because, he notes, “most information [about long-term care needs] that is out now is for those in their 60s and 70s.”
Concludes Hayes: “If the industry and the government have a tremendous interest in getting baby boomers on private insurance, somebody will need to take initiative.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, July 20, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.