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Who Is More Prepared Financially to Handle Long-Term Care: Women or Men?

Who Is More Prepared Financially to Handle Long-Term Care: Women or Men?

Many Americans have inaccurate assumptions of how they will pay for long-term care needs. They believe that Medicare, supplemental policies or standard health insurance will cover the expenses. Consequently, they are not adequately (financially) prepared to provide for their future care.

This was evidenced in a survey conducted by market researchers Mathew Greenwald & Associates on behalf of The MetLife Mature Market Institute and AARP Health Care Options. They questioned a demographically balanced sample of 1,000 adults aged 50+ on the source from which they would pay the bulk of their long-term care costs, and more than three in ten named sources that are not feasible. Twenty-one percent of both male and female respondents cited Medicare as their chief means of paying for long-term care. Seven-percent of the men and nine-percent of the women answered health insurance, and three-percent of the men and one-percent of the women answered disability insurance. However, 19% of the male respondents and 13% of the females chose personal investments and assets, and 14% of the men and 16% of the women picked long-term care insurance.

One in five men and women responded that they have a long-term care insurance policy. However, a large proportion of these respondents do not have standalone policies. In actuality, 4% of men and 5% of women said that their policy is part of another health insurance or disability insurance policy, or that their long-term care insurance is a federal program such as Medicaid or Medicare. Only 16% of men and 14% of women said they had a long-term care policy that is separate from other insurance or federal programs.

If forced to rely on only their own savings, investments, and assets, 40% of women believe they don’t have enough money to pay for a single year of nursing home care, which is estimated at around $66,000. Only 31% of men felt that they couldn’t pay for a year’s nursing home care using their personal assets. Sixteen-percent of women and 18% of men reported that they could pay for one or two years of care, but men are almost twice as likely to believe they have enough to pay for at least three years of nursing home care. In fact, 26% of women said that they do not know how many years they could pay, while only 19% of men were unsure about the number of years of care they could pay. The difference between men and women’s ability to pay for nursing home care is not an issue among Boomers, but it emerges as a concern as the age of the respondents increased.

Among those respondents who do not already have long-term care insurance, 42% of men versus 32% of women said that they have considered purchasing coverage at some time. This difference in attitude toward purchasing long-term care insurance is apparent only between married/partnered men and women, and the difference increased as the age of the respondents increased.

Do the Sexes Differ When It Comes to Their Expectations About Long-Term Care?

Do the Sexes Differ When It Comes to Their Expectations About Long-Term Care?

According to The American Association of Homes and Services for the Aging,by the year 2020, 12 million older Americans will need long-term care.  The same study concluded that at age 65, people have at least a 40% risk of requiring care in a nursing home at some point during their lifetime. Despite these staggering statistics, most Americans do not have realistic expectations about long-term care.

The results of a survey that polled a demographically balanced sample of 1,000 adults age 50 and over gave a good indication of what most Americans think about long-term care. The market research firm Matthew Greenwald & Associates conducted the poll at the request of The MetLife Mature Market Institute and AARP Health Care Options. They discovered that when older men and women are asked about becoming disabled and needing daily assistance bathing, dressing, and eating, men’s expectations for how they would be cared for differ from women’s. Men were more likely than women to answer that their spouse or partner would take care of them, and much less likely to respond that their children or stepchildren would become their primary caregiver. They were also less likely to feel that moving in with children would be necessary. Eighty-eight percent of the men chose their partners as the person most likely to be their primary caregiver, as compared with 72% of women.

The study also concluded that 41% of men with children believe their children would become their primary caregiver. However, 55% of women believe their children will be their caregivers. In the same vein, only 26% of men view residing with their children or their spouse’s children as a possibility as compared to 39% of women. These differences in perceptions of children’s roles in long-term care occur only between men and women who are married or living with a partner.

The difference between older men and women in the likelihood of moving in with their adult children is especially significant among Baby Boomers, as almost half of the 50- to 58-year old women believe it is probable they would move in with their children or their spouse’s children. However, when questioned about assisted living facilities and nursing homes, men and women were like-minded. Sixty-four percent of men and 65% of women believe that living in an assisted living facility is possible, while 55% of men and 50% of women felt the same about living in a nursing home.

Among older Americans who are married or living with a partner, 9 out of 10 men and women believe it is likely that they will become their spouse’s primary caregiver if they become disabled. The highest percentage of women who felt this way was found among the 50-to-58 year-olds, with 84% responding affirmatively.

The study found that 43% of men and 38% of women who have children, or whose spouse/partner does, believe it is “very” or “somewhat” likely the children would become their spouse’s primary caregiver.

Is Long-Term Care Coverage Right for You?

Is Long-Term Care Coverage Right for You?

According to the Congressional Budget Office (CBO), “Over the next several decades, the population of U.S. seniors – people aged 65 and older – is expected to grow rapidly, more than doubling by 2040. That surge will probably produce a similar increase in the demand for long-term care services – the personal assistance that enables people who are impaired to perform daily routines such as eating, bathing and dressing.”

While Medicaid covers a portion of LTC costs, you may have to exhaust a great deal of your assets in order to qualify due to strict financial eligibility guidelines. Additionally, rising nursing home costs, which, according to the 2006 MetLife Market Survey of Nursing Home and Home Care Costs, now cost on average $206 a day-$75,190 a year, can lead people to wonder how they will ever be able to afford long-term care if they should ever need it. A product that can help is Long-Term Care (LTC) Insurance.

In general, a LTC insurance policy works by paying a selected dollar amount per day for the type of long-term care outlined in the policy. The most common method insurance companies determine when benefits should be paid, is based on your inability to perform certain “activities of daily living” (ADLs), such as eating, bathing, transferring in and out of bed, and dressing. Usually, benefits are payable when you are unable to perform a specified number of ADLs.  However, some policies will only pay benefits when your doctor certifies that the care is medically necessary.

Some life insurance policies offer long-term care coverage as an option. For instance, the policies would contain a rider that allows the policy’s cash value or a portion of the death benefit to be used to fund LTC expenses. Typically, a portion of the death benefit would be paid on a periodic basis after the insured qualifies. However, money received under this option will usually reduce the amount of death benefit the beneficiary will eventually receive.

LTC insurance is not for everyone; the choice to obtain it or not can depend on your age and financial circumstances. Generally, if you meet the following requirements, you should consider a LTC policy:

·        You are between the ages of 40-84.

·        You have significant assets to protect.

·        You can afford to pay premiums now and in the future.

·        You are in good health, and are insurable.

Since there are many LTC options available, it is best to consult your financial professional for help in determining whether this coverage is right for you.