Experiencing the Value of Long-Term Care Insurance


Long-term care insurance is a touchy subject. It exists as a way to mitigate the expense of long-term health care, which can be devastating to a person or family if the person needing care requires specialized care for a number of years.

Because of the high cost of medical care in the United States, long-term care insurance is very expensive. LTC insurance carriers must hope some LTC insurance buyers never need the insurance so they can balance the high cost of protecting those LTC insurance owners who do need it.

Most Americans do not purchase LTC insurance. Wealthy investors believe they have the assets necessary to pay for care when the time comes, others believe they can access the necessary funds from other savings vehicles, while still others pray they will never need it. Many insurance carriers do not sell LTC insurance due to its high cost and lack of popularity.

However, for those people who do purchase LTC insurance and then employ it for the purposes of paying for a loved one’s medical and nursing care bills, it can be a godsend.

LTC insurance carriers would benefit from testimonials from people who have witnessed the benefits of owning LTC insurance. Such testimonials exist in Spectrem’s new study on end-of-life financial decision-making.

In the Spectrem study Down To The Last Detail, investors who have been instrumental in the care of a dying family member or who has participated in such care provide information about the financial state of affairs for that loved one. They then reflect upon how their role in the financial affairs of a dying family member influences their own plans for preparing their financial matters for the inevitable.

The study differentiates between those who had differing levels of involvement in executing the final plans of an older relative who passed away, as well as those who are currently responsible for assisting a living relative in anticipation of the day they pass away. Those respondents are compared to investors who are not involved with the financial concerns of relatives but have made preparations for their own passing.

The following capsulizes the findings of the study as they relate to long-term care insurance:

·         Twenty-two percent of all investors have purchased long-term care insurance, and another 17 percent intend to do so.

·         One-third of those investors who have long-term care insurance made the purchase on the advice of their financial advisor.

·         Thirty-one percent of LTC insurance owners made the purchase in order to avoid being a burden to their children in the future, while 15 percent made the purchase after witnessing a loved one’s finances impacted by a lengthy illness and wishing they had purchased LTC insurance.

·         Most importantly, between 30-35 percent of people who had some responsibility dealing with the financial plans of a loved one who passed away said their appreciation of LTC insurance increased after dealing with the death of the family member. Among those investors currently dealing with the finances of a loved one who has not yet passed away, almost 40 percent reported an increased appreciation of LTC insurance.

The results of the Spectrem study show that when people are subjected to the situation in which a loved one requires medical care for a long time, LTC insurance becomes a good idea.



©2020 Spectrem Group



Keywords: long-term, LTC, insurance, investors, advisors, Spectrem, last detail