About half of people age 50 and over say that paying for their LTC costs will take away from the money intended for their children as an inheritance. Forty-three percent would rather use these funds to cover LTC costs than pass money to their heirs. However, the escalating costs of health care and lack of proper planning have many Americans hoping just to break even and not be a burden to their children. The Harris Interactive poll surveyed 813 Americans age 50 or older with at least $150,000 in income or investable assets.
Only 21% expect their children to be helping them in retirement – including giving physical care and financial support, and letting them live in their homes.
The survey also reveals the following:
• 45% have discussed the cost of LTC with their spouse; 23% have discussed it with their financial advisor; 10% have discussed it with their children; and 6% have discussed it with their parents.
• Only about 11% of people over 55 have LTC insurance.
• 23% are not planning for LTC expenses; 22% plan to cover the costs with their 401(k) or retirement savings; and 21% plan to use their personal savings.
• 64% are not aware that some states have laws that can force children to pay their parents’ unpaid nursing home bills.
John Carter, president of distribution and sales for Nationwide Financial said, “It is important to start discussing LTC planning as a family and develop a well thought out plan so that parents and children understand where LTC funding will come from and parties feel secure in the approach.” The traditional stand-alone LTC policy is the most commonly known long-term planning choice. While these products are very customizable, some people don’t like the use it or lose it aspect. Some innovative products include LTC riders that can be added to life insurance coverage, he added.
Advisors report that only 15% of their clients have a good understanding of the potential costs of LTC. People living to age 65 have a 70% chance of needing some type of LTC in their lifetime. The average cost per year for a nursing home is projected to be $265,000 by 2030 and that is not even for a private room. For more information, visit http://www.nationwide.com/life-insurance.jsp.
