When it comes to the future, your clients have a lot on their minds. However, a recent study indicates that being able to afford health care as they age may be chief among their concerns.
AARP survey results showed that more than half (55%) of working Americans over the age of 50 don’t think they’ll have enough money for health care when they retire. Meanwhile, 38% percent said they have not saved anything for such expenses.
“Our survey shows that Americans haven’t planned enough for health expenses in retirement,” AARP Vice President for Financial Security Debbie Banda said in a media release. “Even though these costs can have a significant impact on retirement savings, families and individuals often struggle to save what they need because they are paying other necessary expenses or helping to support other family members or loved ones.”
On the other hand, some clients may overestimate how much help Medicare will provide them as they age.
“When faced with future health costs, many people are either overwhelmed or overconfident,” Banda continued. “Thinking that your health care will be paid for by Medicare alone or avoiding health care planning altogether are not the right solutions. The more you know and plan for you and your family’s health care, the better off you will be in the long run.”
Beyond medical needs
Another factor Americans should be focusing on concerns long term care. All too often, individuals assume long term care falls under the umbrella of medical services programs like Medicare are intended to cover. However, Medicare will only provide funding for very specific long term care needs, and only for a limited period of time.
This is one reason why more Americans are turning to long term care insurance. Data from the American Association for Long Term Care Insurance shows that LTC insurance companies paid a record $7.5 billion in claim benefits during the previous year. That equals out to $20.5 million a day.
“Nearly 300,000 Americans and their families received benefits last year because they had long term care insurance coverage,” Jesse Slome, director of the AALTCI, said in a media release. “Seeing how aging parents benefit from having coverage often motivates the next generation to initiate their own long term care plan.”l
The need for LTC insurance becomes even more clear as Americans continue to enjoy longer lives. According to The Washington Post, people born in 1930 had a life expectancy of 59.7 years. That number jumped to 70.8 years in 1970. Now, those born in 2012 are expected to live 78.8 years.
Longer lives translate to a greater need of care as we age, and just like with health care, it’s a financial challenge many Americans are unprepared to contend with.
Putting insurance to work
Besides LTC insurance, financial professionals know that other coverage options can also provide their clients with the financial safety net they’re looking for.
For instance, life insurance policies aren’t just used to pay out benefits upon the policyholder’s passing. These products can also be used to provide supplementary income to pay for things like health care and long term care.
Unfortunately, too many individuals view life insurance as a very specific tool. Insurance producers are in the best position to help people understand the different options they have, and how they can put life insurance and other coverage options to work to help them afford the care they need in the future.
With the latest data in mind, it appears that clients are waiting for a solution. It’s your turn to provide one.