With October closing with Halloween tomorrow, more consumers are starting to get frightened by the potential costs of long-term care (LTC) eating away at their retirement accounts.

The scarier thought involves how LTC planning resonates within consumers’ heads, but most of them are not confident in their LTC strategy. According to the 2024 Long-Term Care Consumer Study by OneAmerica Financial, 74% of consumers feel they are likely to need LTC in the future, and nearly two-thirds (64%) say LTC planning is a priority – but only 33% are confident in their plans.

The statistics and costs are why AIP Marketing Alliance is focusing on LTC as November is Long-Term Care Awareness Month. LTC month is a perfect time to raise awareness about the impact of long-term care on loved ones, and to encourage people to have conversations about long-term care planning during those holiday gatherings during the next couple of months.

Why are consumers not buying LTC or hybrid life insurance/LTC policies? OneAmerica states multiple reasons ranging from competing financial priorities to confusion about their range of options to feeling overwhelmed by the perceived cost of LTC protection.

Cost remains a key concern per OneAmerica Financial. While Americans are now generally sold on the need to plan, rising interest rates and stubborn inflation may have contributed to their reluctance to do so: Nearly half (48%) now cite the cost of medical and other support related to LTC needs, and more than a third (35%) say competing financial priorities get in their way.

Some consumers also are unsure if they actually will need LTC care in the future, and most people do not plan for these potential expenses.

According to the Administration for Community Living, the duration and level of long-term care will vary from person-to-person and often change over time. Their statistics also are staggering as the site states someone turning age 65 today has almost a 70% chance of needing some type of long-term care services and supports in their remaining years.

Women need care longer (3.7 years) than men (2.2 years), and one-third of today's 65 year-olds may never need long-term care support, but 20 percent will need it for longer than 5 years per the ACL website.

Based on those statistics, OneAmerica Financial stresses how LTC is important including how unexpected long-term care expenses could “devastate” finances and “drain assets” especially since government programs (Medicare, Medicaid) provide limited LTC coverage. Waiting to buy LTC protection also could lead to consumer exclusion from coverage due to a pre-existing condition.

Self-funding also could be a risky proposition according to the study.

• Conditions with protracted care needs, like Alzheimer’s, will require resources not covered by programs like Medicare and could deplete all financial assets before Medicaid covers significant expenses, such as nursing home care.
• The Milliman Retiree Health Cost Index suggests a 65-year-old couple will need to use nearly $400,000 in savings toward “standard” health care in retirement. This does not include expenses for LTC.
• If one of the couple has dementia, this could add another $400,000 in expenses, reports the Alzheimer’s Association.
• Three-quarters (77%) of consumers with personal experience with LTC noted an increase in the cost of care as the level of care needed escalated.

At this point, AIP Marketing Alliance has shared a lot of information, resource links, and statistics on why you should consider a conversation with clients about their long-term care planning as part of their retirement strategy. Now, let’s take a minute to share the current costs of care nationwide.

At the website, whatcarecosts.com, you can literally search the United States map to drill down into long-term care costs within a specific state or city/area within that state. You can review costs of skilled nursing, home care, and assisted living within cities, compare to other regions, and provide an accurate picture of average and median LTC costs for your clients.

For example, the national averages for cost of care currently are:

• Skilled Nursing Homes (daily): $277 for semi-private room; $316 for a private room
• Home Health Care (hour/visit averages): $31 hourly; $130 licensed nurse (per visit); $148 registered nurse (per visit)
• Assisted Living Facilities (monthly averages): $5,188 studio apartment; $5,463 one-bedroom apartment; $5,310 two-bedroom apartment

In comparison, these cost of care expenses are different and higher for the state of California.

• Skilled Nursing Homes (daily): $307 for semi-private room; $353 for a private room
• Home Health Care (hour/visit averages): $35 hourly; $138 licensed nurse (per visit); $148 registered nurse (per visit)
• Assisted Living Facilities (monthly averages): $5,786 studio apartment; $6,585 one-bedroom apartment; $5,982 two-bedroom apartment

As stated above, LTC costs can vary from state-to-state or even city-to-city. The What Care Costs website is a solid resource to share with your clients who are planning to retire within their current location or possibly a different state/town.

AIPMA also is promoting Long-Term Care Awareness Month throughout November as we have created 2024 social media resources and a new video to help our valued independent life insurance wholesalers and agents. These customizable graphics are available free of charge and can be branded with your logo and contact information. Watch our social media platforms on LinkedIn, Instagram, Facebook, and YouTube for these LTC posts.

If you have a client or prospect looking to protect their retirement savings with a long-term care insurance product, please contact AIP Marketing Alliance’s Business Development team at (800) 783-5206 Press #2 or marketing@aipma.com. Our professionals can review the situation, suggest some stand-alone and hybrid LTC products, and create some illustrations for your appointment.

For more than 40 years, AIP Marketing Alliance (AIPMA), an Integrity Company, serves as a premier life insurance and annuity distribution partner to provide full-service support to independent wholesalers, brokerages and agents from our Troy, Michigan office. NOT AFFILIATED WITH OR ENDORSED BY THE GOVERNMENT OR THE MEDICARE PROGRAM.

AIP Marketing Alliance is committed to MORE in ’24 as we are launching a bunch of new resources to support our independent insurance wholesalers and agents. Visit our blog on aipma.com to stay informed on these upcoming launches and learn why wholesalers nationwide choose AIPMA as their distributor for selling life insurance, annuities, long-term care insurance, final expense, and much more. Ask about our lead services, myAIP CRM platform with customizable recruiter portal, and online tools/resources designed to grow your business.

AIP Marketing Alliance, an Integrity Company, has developed this electronic communication for informational and educational use only. Be advised, AIP Marketing Alliance, Inc. does not provide legal advice, tax advice, or guidance on issues involving securities laws, insurance laws nor securities or insurance regulations. This material should not be relied on as providing any such advice or guidance to either agents or retail consumers. Within this communication, AIPMA shares links for usage as information only. This content should not be interpreted as solicitation to purchase life insurance, annuities, or other products or as advice designed to meet your clients’ specific needs. Content involving fiduciary, tax, or legal advice should be directed to your legal, tax, and financial professionals for specific advice or product recommendations. AIPMA will not accept any legal liability resulting from any use of 3rd party material(s).