Baby boomers have seen first-hand the value of long term care insurance: Among those whose parents collected on a policy, 72% said it was a good value in a Mathew Greenwald survey.
And sadly, four in ten of the adult children of parents who needed long-term care, but lacked insurance said a policy would have made it easier for them to get the care they needed. Sixty-three percent say it would have increased the quality of care.
A majority (64%) of those whose parents used the coverage stated they were likely to purchase coverage themselves, and 17% of this group actually owned a policy, compared to 9% of all those surveyed.
The online survey of 1,073 Americans ages 46 to 64 was conducted by the research firm on behalf of New York Life.
"Boomers voiced an inclination to buy this coverage, but on the whole have not yet purchased it, creating an interesting disconnect," said Mike Gallo, senior vice president in charge of Long Term Care, New York Life. “The fact is that just about everyone buys fire insurance to protect their home even though they hope they will never need it—yet both the probability and the financial cost of a long term care event could be much greater."
That disconnect may be changing. Sales are up more than 10% this year for the industry as whole. At New York Life, the average buyer is 52.
What are the reasons they hold off on the purchase? One clue is that they badly underestimate their own chances of needing care. Only 23 percent said they believed they will need care, although studies generally estimate that a majority will. And 47% at least somewhat agreed with the statement that “long-term care insurance is not worth the cost because you may never use it.”
At the same time, 41% already have had or currently have a parent who needs care and large majorities say they worry that their parents’ won’t be able to afford good care or that it will exhaust their savings.
According to government figures, at least 70 percent of people over age 65 will eventually require some form of help with personal care such as dressing or using the bathroom and 40% will need a nursing home, which now cost $80,000 a year on average.