It’s no secret that Americans are living longer lives. Over the past 100 years, life expectancy has increased by over 50%. But with a longer life span comes additional burdens. As longevity increases, so does the likelihood individuals will need assistance with day-to-day activities. In fact, nearly 40% of people needing long term care are adults 18 to 64 years old, and that percentage rises with age: Americans who reach age 65 have at least a 60% chance of needing long term care at some point, according to the American Society on Aging.
For baby boomers, this likelihood is causing considerable concern. The MetLife Survey of American Attitudes toward Retirement found that 88% of baby boomers worry about not being able to function due to physical limits as they age.
Insurance agents and financial advisors can play an important role in helping boomers plan for their long term care needs and protect against the financial risks associated with the spiraling cost of care.
Understand the need
While most baby boomers understand that they will most likely need long term care at some point in their lives, few have factored the cost of care into their retirement plans. As a result, they underestimate the impact of a health-related event or LTC condition on the projected stream of income they will need to live comfortably in retirement.
Consider the following statistics, gleaned from the Long Term Care IQ Study from the MetLife Mature Market Institute:
oFewer than 4 in 10 consumers surveyed understood the projected longevity for someone who is age 65.
o3 out of 4 incorrectly identified the percentage of people over age 85 that need assistance with activities of daily living.
oOnly 1 in 5 correctly identified that most long term care takes place in the home.
oAlmost half underestimated the cost of care in a nursing home.
o4 in 10 mistakenly believed they are entitled to basic coverage for long term care from the government.
oMore than 6 out of 10 did not correctly estimate the cost of waiting to buy LTC insurance until an older age.