Consumer Insights on Long-Term Care Planning Highlight Hybrid Insurance Demand
A recent white paper by OneAmerica Financial sheds light on consumer attitudes toward long-term care (LTC) planning, providing valuable insights for financial professionals advising clients on LTC protection. The research is based on two studies conducted in 2022 and 2024, focusing on consumer awareness of LTC needs and the perspectives of those who have researched LTC options. A significant driver for consumers in planning LTC coverage is peace of mind, driven by concerns about financial security, retirement stability, and ensuring adequate care. Personal experience with LTC, particularly exposure through family or friends, strongly prompts consumers to consider LTC planning, with younger consumers showing a higher likelihood of purchasing hybrid LTC insurance products that combine life insurance with LTC benefits.
Cost remains the primary barrier for consumers when considering LTC insurance, with over half citing expense concerns and competing financial priorities as major deterrents. Additional obstacles include insufficient information, uncertainty about future LTC needs, and psychological resistance to planning for illness or disability. There is wide variability in consumer understanding of LTC policy costs, underscoring the role of financial professionals in educating clients about options and value propositions, including the protection against catastrophic expenses and potential legacy benefits offered by hybrid insurance products.
The paper highlights that approximately half of consumers plan to utilize a combination of personal savings, LTC insurance, health insurance, Medicare, Medicaid, and long-term disability insurance to cover LTC expenses. Notably, hybrid LTC solutions are gaining traction due to their flexibility in benefit payouts and alignment with consumer preferences for care settings.
Despite a strong expressed interest in LTC planning, with 64% prioritizing it and 74% anticipating the need for LTC someday, confidence in current plans remains low at 33%. This gap highlights the need for professional guidance to navigate LTC options effectively. The survey supporting this white paper was conducted online in May 2024 with 1,000 respondents aged 40 and older. Overall, the report emphasizes the growing importance and appeal of hybrid LTC insurance products and the critical role of education and advisory services in LTC decision-making.