Research reveals middle-income household gap on long-term care insurance

A new survey commissioned by Certification For Long-Term Care highlights a significant gap in middle-income consumers’ understanding of the financial risks and costs associated with long-term care.

The findings, presented at the organization's Annual Leadership Summit, emphasize differences in long-term care planning behaviors across income groups.

One of the key findings of the survey, supported with sponsorship from CareScout, Oliver Wyman, and ET Consulting, is that middle-income consumers are less likely than their upper-income counterparts to recognize that long-term care costs are typically paid out-of-pocket unless insurance is in place. 

“Upper-income consumers are more inclined than their middle-income counterparts to engage in product purchases or make financial investments to prepare for LTC needs—such as buying long-term care insurance or increasing retirement savings,” Eileen J. Tell, CEO of ET Consulting, said in a statement.

Another major disparity involves meeting with professionals to discuss long-term care options. Middle-income consumers were less familiar with long-term care insurance and reported greater concerns about affordability, which could be contributing to their reluctance to explore such options. Many in this demographic also cited the belief that they will not need long-term care or would rely on family caregivers instead of purchasing LTCI.

The survey found that middle-income respondents would be more likely to consider planning options if they had access to reliable information, particularly from trusted financial advisors. The potential role of government-sponsored websites was also highlighted as a key factor in increasing interest in exploring care planning.

Additional findings showed that middle-income consumers were less likely to increase retirement contributions specifically for long-term care (19 percent) compared to upper-income consumers (25 percent). However, both groups expressed similar interest in speaking with a financial planner or setting money aside for future care, with 29 percent of middle-income respondents choosing the former and 25 percent the latter.