Most U.S. residents understand that they might need long term care, but they greatly underestimate the cost of such care, according to John Hancock Long Term Care.
Hancock, part of Manulife Financial Corp., Toronto, found when it commissioned a survey of 935 people ages 21 to 75 that more than 80% of participants knew that the average lifetime chance of needing long term care is more than 40%.
But about 70% said they thought the average cost of nursing home care is about $30,000 per year or less, when, in fact, the actual average is about $75,000 per year, Hancock says.
Fewer than 20% have made any plans to cover future LTC costs, 45% have the mistaken impression that Medicare pays for most long term care, and 69% said they could pay only $1,000 to $14,000 out-of-pocket for care per year, Hancock says.
Many participants knew about the existence of LTC insurance, but 40% were not aware that most LTC insurance covers care that insureds receive in their own homes.