By

As baby boomers roll on toward retirement in record numbers, a new survey by MetLife Inc., New York, finds that only about a third of older Americans have a basic understanding of long term care.

“To understand long term care, people need to understand longevity,” says Joyce M. Ruddock, MetLifes vice president for long term care. To a large extent, they dont, she adds.

The study finds older Americans dont understand 2 important points about aging, she says: One is that if they live to age 65, they probably are going to live at least 18 more years; and second, they eventually are likely to need help with several activities of daily living.

Failure to grasp those crucial points may be why many Americans flunked the study, which MetLife calls its “Long-Term Care IQ Test.”

It recently gave the test online to almost 1,500 adults between 40 and 70 years of age.

Judging from the results of the test, agents and brokers selling LTC insurance may have a huge education job on their hands.

Some 63% of respondents failed the 15-question test, meaning they got 8 or fewer answers correct (see chart).

In other words, only 37% of older Americans can make informed decisions about providing for their future LTC needs, MetLife notes.

Although 86% correctly defined LTC as continuing assistance with such everyday activities as bathing or dressing, 55% incorrectly connected it exclusively with the care provided in nursing homes. Only 18% knew that LTC services usually are provided in the recipients own home.

(Another recent study by the National Alliance of Caregiving and the American Association of Retired Persons found 55% of LTC recipients receive care in their own home.)

Americans also have largely unrealistic beliefs about the actual cost of LTC services, according to MetLife. Only 27% correctly estimated the average annual cost of receiving LTC in a nursing home. (At the time of the survey, it was generally between $60,000 and $70,000.) In fact, 45% of those taking the test underestimated the cost, and 27% overestimated it.

Other misconceptions uncovered by the survey:

–41% mistakenly believe that they are entitled to basic coverage for LTC in addition to health insurance from the government at retirement.

–63% did not correctly guess the cost of waiting until they were older to buy LTC insurance. That included 28% who underestimated the cost of waiting and 34% who overestimated it.

–41% think, incorrectly, that LTC is an entitlement for all Americans upon retirement. The same percentage also wrongly think Medicare, Medigap or disability insurance pay for this care.


Reproduced from National Underwriter Edition, October 7, 2004. Copyright 2004 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.