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Fear and Hope Prevent Americans From Long Term Care Planning
(September 27, 2011) Fear and Hope Prevent Americans From Long Term Care Planning, Concludes Sun Life Financial Pulse Poll
A poll released by Sun Life Financial Inc. (NYSE: SLF, TSX: SLF) suggests that discomfort over aging and hope of remaining independent through their golden years prevents many Americans from planning for long term care. Yet according to the Department of Health and Human Services, 70% of Americans age 65 and older will eventually need some form of assistance with daily living, such as with bathing, dressing, or eating.(1)
"Our survey shows that fear and wishful thinking paralyzes many people age 50 and older from making contingency plans that we believe can significantly enhance the quality of their final years and in many cases, conserve their finances"
The second in a series of retirement pulse polls by Sun Life Financial, "Shut Your Eyes and Hope for The Best: American Attitudes Toward Long Term Care Planning," surveyed both mainstream and affluent Americans age 50 and older.
"Our survey shows that fear and wishful thinking paralyzes many people age 50 and older from making contingency plans that we believe can significantly enhance the quality of their final years and in many cases, conserve their finances," said Mike Shunney, President of Sun Life Financial Distributors Inc. "Long term care planning is easy to neglect, since some people will never need such assistance. But neglecting to plan can be expensive, given the rising cost of professional care. Instead of hoping for the best, we can all take steps aimed at securing the best possible lifestyle within our means, should we ever need long term care."
Key results include:
- Over half of Americans aged 50 and older worry about long-term care costs, and don't feel confident that they'll be able to meet those costs: Only 16% feel financially prepared to finance their long-term care.
- Yet many respondents shirk from forecasting their chances of someday needing assistance with daily living activities. Of those willing to forecast, the majority don't think they'll need such assistance, which contradicts government projections that 70% of Americans age 65 and older will eventually need long term care.
- Most people don't grasp the scale of rising costs. Median respondents don't realize that based on conservative historical inflation rates, the cost of nursing home care could rise in 2030 by more than double what they project.(2) Conservative projections put long term facility costs (currently averaging $85,000) at $190,000 in 2030. (3)
- The depth of desire to receive long-term care at home is striking: Most Americans age 50 and older (83%) would rather survive 5 years at home than survive 10 years in a nursing home.
- Over a third of respondents with a partner (32%) would have to be physically forced to enter a facility if their partner were living in a different facility.
- Despite such strong preferences, many respondents who have decided where they want to receive long term care have not consulted key family members or advisors.
Download the full report.
About Sun Life Financial
In June of 2011, Sun Life Financial introduced Sun Care Whole Life (WL), a single premium whole life insurance policy with a linked benefit that owners can apply to long-term care costs, including for in-home care, assisted living, and nursing home facilities. Sun Care Whole Life policies are issued by Sun Life Assurance Company of Canada (Wellesley Hills, MA). All guarantees are based on the claims-paying ability of the issuing company. Sun Care may not be available in all states and may vary depending on state laws and regulations.
Information can be found at www.sunlife.com/us.
(1) U.S. Department of Health and Human Services. National Clearing House for Long Term Care Information, September, 2008.
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(2) Given a hypothetical annual nursing home rate of $80,000, the median respondent projected a rise of 56%, to $125,000 in 2030, versus a rise of 123%, to $178,000, assuming the 4.3% historical inflation rate of the CPI's nursing home component.
(3) The following estimates of average current and projected long-term care rates are based on the American Association for Long Term Care Sourcebook and long-term care components of the Consumer Price Index: Current annual nursing home rate for a private room: $85,000. Projected annual rate by 2030: $190,000. Current annual 24/7 in-home care rate: $184,000 a year. Projected annual rate by 2030: $272,000. Current 40 hr/wk in-home care rate: $44,000. Projected 40 hr/wk in-home care rate by 2030: $65,000.
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