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Health care a greater concern among more conservative investors

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The cost of health care is a top concern of retail investor households, according to a new report.

Cerulli Associates discloses this finding in its first quarter 2016 issue of “The Cerulli Edge: U.S. Retail Investor edition.” The report explores health care costs and portfolio downside, and the risk these pose to retail investors’ financial stability.

The report shows that two of the top five concerns among households concerns are health care-related. Among the five:

  • Planning for retirement (18 percent of households);

  • Protecting current levels of wealth (16 percent)

  • Cost of health care (11 percent)

  • Health of myself or family member (11 percent); and

  • Level of cash flow for the household (8 percent).

Cerulli points to the data as an “an area of opportunity” for financial service professionals when engaging clients and prospects.

“Investors will certainly be reminded of the issues surrounding health care in the U.S., because the repeal or replacement of the Affordable Care Act passed in 2010 will be a major impetus of the GOP candidates,” says Shaun Quirk, senior analyst at Cerulli. “No matter the party lines, rising health care costs affect millions of individuals, and will grab front-page headlines throughout the 2016 campaign season.”

“If providers are going to offer comprehensive planning, the health care topic needs to be part of the process,” adds Quirk. “The cost of health care and ‘health of self and family’ become progressively important topics as investors near retirement, with the data indicating a significant increase in importance between Generation X and the baby boomer generation.”

The report also highlights a correlation between health care concerns and investment approach. Among nearly 3 in 10 conservative investors who are “highly risk-averse,” health care is a top concern. That compares with about 1 in 6 aggressive investors who are “willing to take significant risk to gain substantial returns.”