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Survey: 2 in 5 Americans don't know how they'll pay for long-term care
By Insure.com staff

Despite the growing number of Americans who need long-term care, two in five adults don't know how they will handle their own needs for long-term care or don't plan to address their potential needs, according to a new survey released by Northwestern Mutual Insurance.

Among 45 to 54-year-olds that portion rises to 54 percent.

"People are living longer, so the need for care is very real," Steve Sperka, Northwestern Mutual vice president of long-term care, said in a press statement. "Planning ahead and putting solutions in place for potential care needs gives families options and helps protect retirement nest eggs."

People who have provided care for a loved one are more likely to be planning for their own long-term care needs. Among the 18 percent of respondents with caregiving experience, 69 percent know how they will handle long-term care or are planning to address it.

Northwestern Mutual is among insurers that sell long-term care insurance, which covers the cost of care when people are unable to take care of themselves. Depending on the policy, the coverage can pay for assisted living, nursing home, home health and adult day care services.

The study found that many adults misunderstand how long-term care costs are covered. Forty-three percent of U.S. adults think Medicaid, Medicare, health insurance or disability insurance will cover their long-term care expenses, but usually that's not the case.

Many also underestimate the impact of a loved one requiring long-term care. That's especially true among those with no care-giving experience.

Among caregivers:

  • Most, 59 percent, said a top challenge was managing the increased levels of stress, and 42 percent said a top challenge was the "physically demanding and draining" nature of the task.
  • Forty-two percent said they provided the ability for loved ones to stay in their own homes. Yet just 31 percent of non-caregivers expect they would provide support for a patient to stay at home.
  • More than a third, 34 percent, reported they had less time to spend with family and friends because of their caregiving responsibilities. Just 25 percent of non-caregivers expect a long-term care event to affect the time they have with family and friends.
  • Forty-seven percent of caregivers between ages 18 and 34, said the costs of providing care had impacted their budgets, and 11 percent had dipped into their own retirement plans to help defray the costs.

Awareness of the importance of planning for long-term care is growing, especially among 18- to 34-year-olds.

"Younger people are more aware today of the effects that long-term care issues could have on their lives, especially if they find themselves in a caregiving role," Sperka said. "As a result, they're taking a more proactive approach to addressing and planning for their own future needs."

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