A new survey reveals that 77% of upper-income consumers are familiar with long-term care insurance, compared with only 67% of middle-income consumers, highlighting a significant knowledge gap in long-term care planning among different income groups.
The comprehensive survey, commissioned by Certification for Long-Term Care and sponsored by CareScout, Oliver Wyman and ET Consulting, was released Sept. 16 at CLTC’s Annual Leadership Summit in Charlotte, NC.
The study found that upper-income consumers are more likely to recognize that most LTC costs will be paid out-of-pocket without insurance. In contrast, according to the report. middle-income consumers often underestimate this financial responsibility, potentially leaving them vulnerable to future care expenses.
Eileen J. Tell, CEO of ET Consulting and the lead researcher, noted that “[u]pper-income consumers are more inclined than their middle-income counterparts to engage in product purchases or make financial investments to prepare for LTC needs — such as buying long-term care insurance or increasing retirement savings.”
The survey also revealed that middle-income consumers are less likely to meet with insurance agents to discuss their LTC options and are more likely to cite affordability concerns when considering LTC insurance. This hesitancy may stem from a lack of understanding about the value proposition of such insurance and the potential financial risks associated with LTC needs.
Researchers Gabriel Alboukrek and Dustin Plotkin of Oliver Wyman observed that upper-income consumers show a greater willingness to use their own money for their LTC needs, reflecting their greater financial resources. Middle-income consumers, however, are more hesitant to commit to such investments, they said.
The study suggests that middle-income individuals might be more receptive to planning options if they received information from a trusted adviser familiar with their personal situation or if objective, reliable information were available on a government-sponsored website. Those findings underscore the need for targeted education and outreach efforts to help middle-income consumers better understand and prepare for potential long-term care needs, according to the study.
