News Release

Most Financial Planners are Enthusiastic, But Public Remains Largely Uninformed, New ACLI Long-Term Care Insurance Studies Find

Washington, D.C. (April 21, 1999) – An overwhelming majority of professional financial planners – 96 percent – believe that long-term care insurance can play an important role in a balanced financial plan. But many Americans don’t understand how long-term care financing works and the vast majority haven’t thought about how they’ll pay for it if the need arises, according to two new studies by the American Council of Life Insurance

. In a survey of 321 professional financial planners conducted for the ACLI by Matthew Greenwald and Associates, no less than 85 percent say they recommend long-term care insurance to their clients – with 72 percent saying they recommend it “very often” or “somewhat often.”

Among the majority of planners who recommend the product, most believe it is equally appropriate for males and females (92 percent); is equally important for married and single clients (80 percent), and should be purchased by the time an individual reaches his or her 50s (87 percent).

Financial planners who recommend long-term care insurance see a need for it across a wide range of income levels: 71 percent recommend long-term care insurance for individuals in the $30,000 to $50,000 annual salary range; 79 percent recommend it for the $50,000 to $75,000 income range; 75 percent recommend it for the $75,000 to $100,000 income range, and 68 percent recommend it for the $100,000 to $150,000 annual income range.

And the study shows that planners’ enthusiasm crosses generational lines. A full 75 percent of the professional financial planners interviewed say they have recommended that their clients consider long-term care insurance for their parents.

Meanwhile, in a separate survey of 1,990 American adults conducted for the ACLI by the Roper Organization, only 12 percent say they have given a great deal of thought to how they will manage if they or their spouse were to require long-term care. A majority – 59 percent – say they have given little or no thought to how their long-term care needs will be provided for.

This second survey also shows widespread misunderstanding of how the costs of long-term care are paid. Fully one-quarter of those surveyed claim to have some type of long-term care coverage – when in fact only about four percent of adults 35 and over are actually covered by long-term care insurance policies. When this 25 percent is asked how they plan to pay for their long-term care needs, 54 percent mistakenly believe their health insurance will cover it.

Of those surveyed by Roper, 40 percent say they are not aware of what long-term care insurance is; another third claim to be aware of the product but say they have not considered purchasing it for themselves, and another nine percent say they have considered buying a policy but have not taken any concrete steps to do so.

Only 13 percent report having actually taken appropriate steps, such as getting information about specific long-term care policies or actually applying for a policy.

Ironically, in the same survey, a majority of 58 percent report they are concerned about the possibility of someday needing nursing home care they won’t be able to afford.

“Americans are clearly not seeking solutions for a problem they fully anticipate facing some day, and they must be encouraged to do so,” says ACLI President and CEO Carroll Campbell. “More than half of women over 65 and nearly a third of men over 65 will require a nursing home stay at some point in their lives. And the fact is that nursing home costs are expected to quadruple over the next 30 years.

“With continued increases in longevity and the retirement of the baby boomers, a long-term care crisis is looming,” Campbell says. “We are encouraged to see that financial planners view private long-term care insurance not only as a way to guarantee a choice of long-term care services, but as a low-cost way to protect financial security in retirement. And we are hopeful that the White House and Congress will provide favorable tax treatment for long-term care insurance premiums this year, to make policies even more affordable for middle class Americans.”