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Money Management & Insurance for Senior Citizens
Americans Less Concerned About Long-Term Care than
10 Years Ago
Yet, more believe LTC costs could significantly
reduce retirement income
 July 5, 2006 - Despite the backdrop of an aging
U.S. population with increasing longevity, and spiraling long term care
(LTC) costs, Americans are less worried today than they were roughly a
decade ago about needing and paying for LTC, according to a new survey
of 1,000 people ages 21 to 75.
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The study, conducted by Greenwald & Associates in
2006 for John Hancock Life Insurance Company (John Hancock), surveys
consumer attitudes about LTC, which are compared with the results of
similar John Hancock surveys conducted in 1996, 1997, and 1998.
Long term care is the help someone who can no
longer perform daily activities such as eating, bathing or dressing
would need. This care can be received at home or in an assisted living
facility, adult day care center or a nursing home.
"Our survey suggests that Americans hold a number
of alarming misconceptions about their potential need for long term
care," said Laura Moore, senior vice president, John Hancock Long Term
Care Insurance. "Their lack of worry and subsequent failure to plan for
long term care despite understanding the financial impact it can have on
people's lives, can lead to serious consequences in the future."
Less Worry
A majority of respondents (57%) said they were concerned about LTC costs
- a number that dropped from 69 percent of respondents in the 1997
survey. In addition, fewer respondents, 51 percent versus 59 percent in
1997, expressed worry about ever needing LTC.
However, a greater number of people believed they
would live to age 85 (64% vs. 61% in 1998), and more felt the cost of
LTC could significantly reduce their retirement income and assets (85%
vs. 76% in 1998).
Less Planning
Despite the level of concern about the reduction of retirement income
and assets, the survey found that the majority of Americans (69%) have
done little or no planning for LTC, versus 58 percent in 1996, and 49
percent in 1997. In fact, 43 percent have not planned at all, up from 34
percent in 1996 and 24 percent in 1997.
Little Understanding of How to Pay
When considering the LTC funding options, many Americans would have
difficulty paying the costs out-of-pocket. Asked how they would pay for
LTC if they were not planning on buying insurance coverage, 43 percent
of respondents, up slightly from 40 percent in 1997, said they'd pay the
entire cost with savings. However, a greater number of respondents (46%)
felt they would not even be able to afford a year of LTC, more than in
1998 (43%).
As for relying on government programs as a source
of funding, reactions were mixed. On one hand, respondents did not
express a great deal of confidence in the future of Social Security,
Medicare, or Medicaid. Sixty-one percent are not confident that Social
Security will be there in retirement, up from 53 percent in 1998; 67
percent are not confident Medicare will be adequate, compared to 61
percent in 1998; and 62 percent are not confident Medicaid will be
available, up from 55 percent in 1998. Yet, at the same time, 47 percent
said they'd pay for LTC costs by qualifying for Medicaid by transferring
assets to family members, up slightly from 45 percent in 1997.
Little Knowledge
The survey also found a lack of knowledge about LTC issues. On a
10-question true/false quiz about LTC basics, the majority of
respondents got only four correct answers, the same result found in
1998.
"Clearly, long term care is difficult for Americans
to think about - in fact, our survey suggests that they are in denial,
taking a chance they won't need care or just ignoring the fact that they
might," said Moore. "In the case of long term care, ignorance is not
bliss. We've found that planning for long term care expenses can
dramatically change the quality of care for those needing care and the
quality of life for their families when a care situation arises. Once
people take the first step in long term care planning, they often find
that it is not as overwhelming and cost-prohibitive as they had
thought."
About John Hancock Long Term Care Insurance
John Hancock, a unit of Manulife Financial Corporation, is one of the
largest providers of LTC insurance overall with more than 912,000
clients and $1.1 billion of in-force premium. John Hancock has paid more
than $1 billion in LTC insurance claims.
Having entered the retail LTC insurance market in
1987, John Hancock is the second-largest provider of individual coverage
in the country. John Hancock began selling group LTC insurance in 1988
and today is the largest provider of employer-sponsored LTC insurance in
the U.S.
In 2002, John Hancock and MetLife were selected
by the Federal Government to offer Long Term Care Insurance to federal
employees, retirees and various family members across the country. The
program is the largest single employer-sponsored LTC insurance program
of its kind.
When the company merged with Manulife Financial
Corporation in 2004, John Hancock Long Term Care Insurance grew to
include Manulife's Avon Long Term Care Leaders (ALTCL), a specialized
LTC insurance third party administrator and risk manager. Located in
Avon, CT, ALTCL is known for its history in product development,
underwriting and claim handling. Over the past 15 years, ALTCL
management has developed LTC insurance programs for more than 20
companies in 14 countries.
About John Hancock and Manulife Financial
John Hancock is a wholly-owned subsidiary of Manulife Financial
Corporation, a leading Canadian-based financial services group serving
millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily
through John Hancock in the United States, the Company offers clients a
diverse range of financial protection products and wealth management
services through its extensive network of employees, agents and
distribution partners. Funds under management by Manulife Financial and
its subsidiaries were Cdn$386 billion (US$330 billion) as at March 31,
2006.
Manulife Financial Corporation trades as 'MFC' on
the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial
can be found on the Internet at
www.manulife.com.
The John Hancock unit, through its insurance
companies, comprises one of the largest life insurers in the United
States. John Hancock offers a broad range of financial products and
services, including whole life, term life, variable life, and universal
life insurance, as well as college savings products, fixed and variable
annuities, long term care insurance, mutual funds and various forms of
business insurance.
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