Fear and Hope Are Poor Guides
By Ric Edelman
Yet these emotions often dictate actions.
Have you purchased long-term care insurance?
If you haven’t, it’s probably because you fear aging and hope you’ll remain independent throughout your golden years.
Fear and hope. Bad guides for decision-making. Yet a 2011 survey by Sun Life Financial suggests that fear and hope are causing many Americans to delay their long-term care planning. That’s unfortunate, because the Department of Health and Human Services says that 70% of Americans 65 and older eventually will need some form of assistance with daily living, such as with bathing, dressing or eating.
Sun Life’s survey of people age 50 and older found that more than half of Americans over 50 worry about long-term care costs and don’t feel confident that they’ll be able to meet those costs. Yet:
- Despite these concerns, many shirk from forecasting their chances of someday needing assistance with daily living. Of those willing to forecast, the majority don’t think they’ll need help, contradicting the government’s estimate that at least 70% will.
- Most don’t grasp the scale of rising costs. The median respondent believed that the cost of staying in a nursing home in 2030 will be $125,000, but a conservative Consumer Price Index projection using historical inflation rates puts it at $200,000 by then.
- The depth of desire to receive long-term care at home is striking: Some 83% of respondents would rather survive five years at home than 10 years in a nursing home.
- Over a third of those with a partner said they would have to be physically forced to enter a facility if their partner were living in a different facility.
- Despite these strong preferences, many who have decided where they want to receive long-term care have not consulted key family members or financial advisors.
Don’t put it off any longer. Consult an independent, objective, fee-based financial advisor who can help you determine how much long-term care insurance you need and find the coverage you need.
Originally published in Inside Personal Finance May 2012