Part 1: 2017 Long-Term Care Research

Transcription

1 Part 1: 2017 Long-Term Care Research Findings from Surveys of Advisors and Consumers Lincoln Financial Group and Versta Research February Lincoln National Corporation

2 Contents Page Research Methods... 3 Consumers...4 Long-Term Care Planning... 5 Burdens of Long-Term Care... 9 Financial Planning for Long-Term Care Paying for Long-Term Care and Long-Term Care Insurance Advisors...22 Approach to Financial Planning Long-Term Care Planning Need for Long-Term Care Insurance Appendix

3 Research Methods Versta Research, a third-party research firm, was commissioned by Lincoln Financial Group to design and conduct two surveys one among consumers and one among producing financial advisors on the topic of long-term care attitudes, experiences, and planning. Consumer Survey Sample of 1,012 U.S. adults Recruited from a national online research panel used exclusively for polling and research Sample was stratified by age, gender, sexual orientation, race and ethnicity, region, and income Final data was weighted to match U.S. Census on age, gender, race, ethnicity, and region Advisor Survey: Sample of 500 producing financial advisors Recruited from a national online business panel used exclusively for research To qualify for the survey, advisors had to have familiarity with long-term care or hybrid products, minimum 5 years tenure as an advisor, and a minimum average client portfolio of $100,000 Advisors represent a full range of channels, including independent broker dealers, wirehouses, regional and insurance broker dealers, banks, and others The surveys were conducted from August 28 to September 22,

4 CONSUMERS 4

5 Consumer Survey Attitudes Long-Term Toward Care Long-Term PlanningCare 5

6 One-third of Americans surveyed believe they will need long-term care. More believe a parent or spouse will. Perceived Likelihood of Needing Long-Term Care 33% likely Self 13% 19% 35% 21% 12% 40% likely Spouse 13% 15% 31% 26% 15% 50% likely Parent 16% 11% 23% 25% 25% Not at all likely (1) (2) (3) (4) Extremely likely (5) Q16. How likely do you feel it is that: a. You will need long-term care sometime (1,012n); b. A parent will need long-term care sometime (766n); c. Your spouse will need long-term care sometime? (759n) 6

7 Most agree that families should discuss long-term care planning, but far fewer have had such conversations. Families should discuss plans for long-term care before they actually need it Conversations about Long-Term Care 97% agree 50% Agree strongly Agree somewhat Disagree somewhat Have talked with About who would provide long-term care... About how long-term care would be paid for Spouse 52% 47% Parents 35% 27% 3% disagree 47% 3% Disagree strongly <1% Children 29% 24% Friends 22% 15% Q34c. How much do you agree or disagree with each of the following statements: Families should discuss plans for long-term care before they actually need it? (1,012n) Q26. Have you had specific conversations with the following people about who would provide long-term care for you if you needed it? ( n) Q27. Have you had (or did you have) specific conversations with a parent about who would provide long-term care for them if they needed it? (745n) Q28. Have you had specific conversations with the following people about how you would pay for long-term care if you needed it? ( n) Q29. Have you had specific conversations with a parent about how they would pay for long-term care if they needed it? (702n) 7

8 Of those who have provided long-term care themselves, half say they waited too long before discussing plans. We waited too long before discussing plans and options for long-term care 13% 49% agree 51% disagree 35% 29% 23% Agree strongly Agree somewhat Disagree somewhat Disagree strongly Q50b. [IF HAS PROVIDED LONG-TERM CARE] How much do you agree or disagree with each of the following: We waited too long before discussing plans and options for long-term care? (226n) 8

9 Consumer Survey Attitudes Burdens Toward of Long-Term Care Care 9

10 Americans surveyed acknowledge a wide range of burdens on family members who provide long-term care. Biggest Perceived Burdens (% all respondents) Burdens Experienced by Caregivers (% saying difficult) The emotional burden of providing care 72% 84% The physical burden and difficulty of care 64% 62% The time burden of providing long-term care 64% 72% The financial burden of cost 56% 40% The health consequences of stress 51% 46% The financial burden of lost earnings 35% 39% Q25. What do you think are the biggest burdens on family members who provide long-term care for loved ones? (1,012n) Q48. [IF HAS PROVIDED LTC] How difficult was it for you: a. Emotionally; b. Physically; c. In terms of your health; d. In terms of how much time it took; e. In terms of lost earnings from work; f. In terms of the financial cost of providing care? (226n) 10

11 Some want and expect their children and spouses to provide long-term care if needed. Families as Insurance Who Will Provide Long-term Care (multiple select) 47% disagree 53% agree My spouse is my long-term care insurance 20% 27% 44% 10% My spouse Rehab facility or nursing home 27% 43% 43% 41% 65% disagree 35% agree Home health aide 37% 39% My kids are my long-term care insurance 33% 32% 29% 7% My children 27% 30% Disagree strongly Disagree somewhat Agree somewhat Agree strongly Someone else 3% 4% Expect to provide Want to provide Q43. How much do you agree or disagree with each of the following statements: a. My kids are my long-term care insurance (707n); b. My spouse is my long-term care insurance (693n)? Q18. If you need long-term care who will mostly provide this care: My spouse; My children; A home health aide; A rehabilitation facility or nursing home; Someone else(1,012n)? Q19. Who would you want to provide this care? (1,012n) 11

12 Consumer Survey Financial Planning for Long-Term Care 12

13 Most believe advisors should discuss long-term care with clients. But few people have had these discussions. Financial Advisors Should Discuss Long-Term Care Plans with Clients Long-Term Care Conversations with Advisors 90% agree 32% Agree strongly Agree somewhat 14% Have talked with an advisor about how they would pay for long-term care if they needed it 57% Disagree somewhat Disagree strongly 13% Have talked with an advisor about who would provide long-term care if they needed it 10% disagree 8% 2% [BASE ALL] Q26c. Conversations with your financial advisor - Have you had specific conversations with the following people about who would provide long-term care for you if you needed it? Q28c. Conversations with your financial advisor - Have you had specific conversations with the following people about how you would pay for longterm care if you needed it? Q34d. How much do you agree or disagree with each of the following statements : Financial advisors should talk about long-term care plans with their clients? (1,012n) 13

14 Most agree that discussing long-term care with an advisor would be valuable, but the topic is out of mind. Value in Including Long-Term Care in Financial Planning Reasons for Not Talking with an Advisor about Paying for Long-Term Care (multiple select) 20% Very valuable I ve never really thought about it My advisor has never raised the issue 33% 32% 78% valuable 22% not valuable 58% 16% 7% Somewhat valuable Not too valuable Not at all valuable Seems like a low priority right now It is outside of what my advisor does It s too depressing to talk about I don t think I will need long-term care 11% 17% 29% 25% Other reasons 8% [IF HOW YOU WOULD PAY CONVERSATION WITH ADVISOR=NO] Q31. How valuable would it be to discuss this and include it in your financial planning? (150n) Q30. Why have you never talked about how you would pay for long term care with your advisor? (150n) 14

15 Consumer Survey Paying for Long-Term Care and Long-Term Care Insurance 15

16 Respondents in the consumer survey (like advisors) underestimate the cost of nursing home long-term care. Annual Cost of Nursing Home Care as Estimated by... $150,000 $125,000 $100,000 $103,000 $75,000 $75,000 $50,000 $54,000 $25,000 $0 Actual National Advisors Consumers Average 1 1 Source: LTCG, 2017 Lincoln Financial Group Cost of Care Survey Advisor Q32. What would you estimate is the average annual cost of a private room in a nursing home facility in the United States today? [mean] (476n) Consumer Q46. What would you estimate is the average annual cost of a private room in a nursing home facility in the United States today? [mean] (965n)

17 Only a third of Americans surveyed feel confident of having the financial resources to pay for long-term care. "How confident are you that you will have the financial resources to pay for long-term care should the need arise? 34% confident 30% not confident 11% 22% 37% 13% 16% (5) Extremely confident (4) (3) (2) (1) Not at all confident Q45. Overall, how confident are you that you will have the financial resources to pay for long-term care expenses should the need arise? (1,012n) 17

18 Most believe they would pay for care through Medicare, Medicaid, or health insurance. How People Would Pay For Long-Term Care If Needed (multiple select) Medicare or health insurance Medicaid assistance 29% 65% In all, 73% believe they will rely on Medicare, Medicaid, or their health insurance for longterm care. My savings or other assets 60% Long-term care insurance 37% Some other way 1% Q20. [IF AIDE OR NURSING HOME WILL MOSTLY PROVIDE CARE] How would you most likely pay for this care? (623n) 18

19 One in seven report having long-term care insurance. Another four in ten are interested. 100% Long-Term Care Coverage 75% 50% 43% 25% 0% 15% Currently Own Interested in Buying Someday Q36. Do you currently have a long-term care insurance policy? [BASE ALL] Q39.How interested are you in purchasing long-term care insurance someday? (1,012n) 19

20 The biggest reasons for not having long-term care insurance are perceptions on cost and being too young. Reasons for Not Having Long-Term Care Insurance (multiple select) Too expensive 44% I m too young 33% Plan to rely on Medicare/Medicaid Annual premiums can keep going up Plan to rely on own savings Too depressing to think about Don t think I will need long-term care Seems like a waste if I never need it Insurance companies may not be able to pay in the future Plan to rely on family for care I m too old Would not qualify given my health Other reasons 19% 18% 15% 13% 11% 9% 7% 7% 6% 6% 7% Q38. [IF NO LTC POLICY] What are the reasons you do not have a long-term care insurance policy? (791n) 20

21 Many see good health and strong faith as the best longterm care insurance. 26% disagree 74% agree Leading a healthy lifestyle is my long-term care insurance 7% 19% 57% 17% 37% disagree 63% agree I shouldn't have to spend my savings paying for long-term care 10% 27% 40% 23% 51% disagree 49% agree Faith that everything will work out is my long-term care insurance 24% 27% 40% 9% Disagree strongly Disagree somewhat Agree somewhat Agree strongly How much do you agree or disagree with each of the following statements? Q34e. I shouldn t have to spend my savings paying for long-term care. Q43c. Leading a healthy lifestyle is my long-term care insurance. Q43d. Faith that everything will work out is my long-term care insurance. (1,012n) 21

22 ADVISORS 22

23 Advisor Survey Approach to Financial Planning 23

24 Two-thirds of advisors take a broad, holistic approach to financial planning. Advisors' Approach to Financial Planning 36% Take a Focused Approach 64% Take a Holistic Approach 99% Want to give clients emotional piece of mind that comes from financial peace of mind 86% Feel it is important to offer advice that supports a client's family Q15. Which describes you better, even if neither is exactly right: I try to help clients with a broad and holistic plan for their overall financial future; I try to stay focused on the financial needs my clients express and have concerns with? Q16. How much do you agree or disagree with each of the following statements: a. It is important to me to offer advice that supports a client s children and other family members; b. I want to give my clients emotional peace of mind that comes from financial peace of mind? (500n) 24

25 Advisors say clients want to plan protection for their spouses and children. Importance of Planning for Children and Spouses 97% important Importance to clients of planning for a spouse s future <1% 3% 49% 48% 67% important Importance to clients of planning for their children 2% 31% 52% 15% Not at all important Not so important Important Extremely important Q11a. How important to your clients is: a. planning for a spouse s future in case something happens to them; b. planning for their children as part of their own financial planning? (500n) 25

26 Advisors feel it is valuable to meet with client with their children or extended family. Value of Meeting Clients Together with Family Frequency of Meeting Clients with Family 8% Very valuable Somewhat valuable 45% 93% valuable Often Sometimes 52% 61% often/ sometimes Not too valuable Rarely Not at all valuable 48% Never 37% 2% 5% 2% Q12. How often do you meet clients along with their children or extended family members? Q13. How valuable (would it be//is it) to meet clients along with children or extended family members? How much do you agree or disagree with each of the following statements? (500n) 26

27 Most advisors see value in addressing long-term care specifically with children and extended family members. Topics Advisors View as Valuable to Address with Children/Extended Family (multiple select) Estate planning 88% Long-term care plans 81% Wealth protection planning 73% Healthcare expenses 65% Life insurance Tax planning 59% 58% Education funding Gift giving 44% 47% Charitable giving 33% Other topics 1% Q14. [IF NEVER OR RARELY MEET] If you were to meet clients along with their adult children or extended family members, which topics would be valuable to discuss? [IF SOMETIMES OR OFTEN MEET] When meeting clients along with their adult children or extended family members, which topics are valuable to discuss? [BASE: IF VALUABLE TO MEET CLIENTS ALONG WITH CHILDREN OR EXTENDED FAMILY] (466n) 27

28 Advisor Survey Long-Term Care Planning 28

29 Nearly all advisors agree that long-term care planning is important for clients. 99% agree Families should discuss plans for longterm care before they actually need it 1% 24% 75% <1% 96% agree Advisors should talk about long-term care plans with clients 3% 31% 65% <1% 96% confident Long-term care planning is in clients best interest 4% 38% 58% <1% 95% important Important that clients include long term care expenses in their planning 5% <1% 45% 50% Disagree strongly/ Not at all confident/ Not at all important Disagree somewhat/ Not too confident/ Not so important Agree somewhat/ Somewhat confident/ Important Agree strongly/ Very confident/ Extremely important Q9d. How important do you think it is for clients to include these things in their retirement planning: Long-term care expenses in case they need it? Q33d. How much do you agree or disagree with each of the following statements: Financial advisors should talk about long-term care plans with their clients? Q41d. How confident are you that long-term care planning is in your clients best interest? Q23b. How much do you agree or disagree with each of the following statements: Families should discuss plans for long-term care before they actually need it? (500n) 29

30 Advisors say only some of their clients are thinking about long-term care expenses. Clients Who Think About Long-Term Care Expenses People are not sufficiently planning for long-term care 5% 28% 42% All Most Some Few 44% 49% Agree strongly Agree somewhat Disagree somewhat Disagree strongly 92% of advisors report having clients who have needed long-term care 22% None 2% 6% <1% Q8d. When you begin working with clients and talk about retirement planning, how many clients are specifically thinking about and planning for how much they will need to cover: Long-term care expenses in case they need it? Q22. How many of your clients have you witnessed experiencing a need for long-term care? Q23a. How much do you agree or disagree with each of the following statements: People are not sufficiently planning for long-term care? (500n) 30

31 Mean Percentage of Clients Advisors have talked with half to two-thirds of their clients about long-term care planning. 100% Percentage of Clients with Whom Advisors Have Discussed... 80% 60% 40% 63% 63% 59% 57% 56% 56% 52% 50% 20% 0% How care costs should factor into their planning Whether they will need longterm care How they would pay for longterm care Whether providing long-term care would be a burden on their family Long-term care insurance Their fears about needing care Who would most likely provide care Who they would want to provide care Q18. With what percentage of your clients have you specifically discussed: a. whether they will need long-term care sometime; b. how long-term care costs should factor into their planning; c. long-term care insurance? Q20. With what percentage of your clients have you specifically discussed: a. who will most likely provide longterm care if they need it; b. who they would want to provide long-term care if they need it; c. how they would pay for long-term care; d. their fears about needing longterm care; e. whether providing long-term care would be a burden on their family? (500n) 31

32 Advisors agree that long-term care can be difficult for clients to discuss. 24% disagree 76% agree Long-term care is a difficult topic for clients to talk about 4% 20% 60% 16% 25% disagree 75% agree Clients are reluctant to talk about long-term care 3% 21% 61% 15% 72% disagree 28% agree Long-term care is a difficult topic for me to talk about with clients 33% 39% 24% 4% Disagree strongly Disagree somewhat Agree somewhat Agree strongly How much do you agree or disagree with each of the following statements? Q33a. Long-term care is a difficult topic for clients to talk about; b. Long-term care is a difficult topic for me to talk about with clients; c. Clients are reluctant to talk about long-term care. (500n) 32

33 Advisors say that typically they raise the topic of long-term care, and clients often prefer not to discuss it. Who usually raises the topic of longterm care, you or your clients? For clients with whom you have not discussed long-term care, is it because... 17% Advisor sees no need to discuss 59% Advisor raises 46% Equal split 32% Equal split 37% Client doesn t want to discuss 8% Client raises Q27. Who usually raises the topic of long-term care, you or your clients? Q28. For clients with whom you have not discussed long-term care, is it because: Usually I see no need to talk about it; Equal split half the time they do not want to talk about it, and half the time I see no need; Usually they do not want to talk about it? (500n) 33

34 The biggest reason for client reluctance is that clients don't think they will need long-term care. Reasons Clients Do Not Want to Discuss Long-Term Care (multiple select) Don t think they will need long-term care 61% Low priority 52% Never really thought about it Too depressing to talk about 43% 42% Cost (vol.) 16% Other reasons 2% Q29. What are the biggest reasons clients may not want to talk about long-term care? (500n) 34

35 Clients become more interested in long-term care planning when they have experience with it. Triggers of Clients Willingness to Discuss Long-Term Care (multiple select) Having someone close to them need long-term care 75% Seeing somebody close become a long-term caregiver 59% Becoming a long-term caregiver themselves Their age 50% 49% Advice from family or friends Having enough income to afford it Advice from an advisor 25% 30% 29% Retiring from a job Having it offered as a work benefit Other triggers 1% 11% 15% Q31. What are the biggest triggers of clients willingness or desire to discuss long-term care? (500n) 35

36 The top reason advisors may avoid talking about longterm care is that clients are not interested. Reasons Advisors May Avoid Talking about Long-Term Care (multiple select) Clients are usually not interested 45% I feel it is a low priority for them 34% I don t think they will need long-term care 17% I do not have good products or solutions to offer them 13% Long-term care seems too far afield from the advising I do 12% Cost (vol.) 9% I don t want to upset them with something that is depressing 9% I am not licensed to sell long-term care products 8% Other reasons 8% Q30. What are the biggest reasons you may not want to talk about long-term care? (500n) 36

37 Median Age of Client Advisors believe age 50 is the ideal age to plan for longterm care, but clients typically wait until age 65. When to Begin Long-Term Care Planning years old years old 20 0 Ideal Age When Clients Actually Start Q24. In terms of a client s age, when do you think it is ideal to talk about long-term care planning? Q25. At what age, on average, do clients actually talk with you about long-term care planning? (500n) 37

38 Advisor Survey Need for Long Term Care Insurance 38

39 Nearly all advisors feel confident about the value of longterm care products for their clients. 93% confident It is smart for clients to have long-term care insurance 1% 6% 45% 48% 89% confident Long-term care insurance is in clients best interest 1% 10% 46% 43% 88% confident Clients need long-term care insurance 2% 10% 50% 38% Not at all confident Not too confident Somewhat confident Very confident Q41. How confident are you that: e. Long-term care insurance is in your clients best interest; f. Your clients need long-term care insurance; g. It is smart for your clients to have long-term care insurance? (500n) 39

40 Advisors agree that long-term care insurance gives clients peace of mind and more confidence about the future. 98% agree Clients who have long-term care insurance feel more peace of mind 0% 2% 48% 50% 96% agree The cost of long-term care scares clients 1% 3% 45% 51% 96% agree Clients who have long-term care insurance feel more confident about their financial future 4% <1% 50% 89% agree 46% Even for high net worth clients who can self-insure, long-term care insurance can provide leverage 1% 10% 52% 37% Disagree strongly Disagree somewhat Agree somewhat Agree strongly Q40. How much do you agree or disagree with each of the following statements: a. The cost of long-term care scares clients; b. My clients who have long-term care insurance feel more confident about their financial future. c. My clients who have long-term care insurance feel more peace of mind. d. Even for high net worth clients who can self-insure, long-term care insurance can provide leverage. (500n) 40

41 Mean Percentage of Clients Advisors say more than half their clients should have long-term care insurance. Far fewer currently have it. Client Need for Long-Term Care Insurance 100% 90% 44% 80% 70% 60% 50% 40% 30% 56% 50% 20% 24% 10% 0% Should have long-term care insurance Expected to need long-term care Currently have long-term care insurance Q17. What percentage of your clients do you think: a. will need long-term care sometime; c. should have long-term care insurance? Q43. About what percentage of your clients currently have long-term care insurance? [BASED ON Q17C] 41

42 Clients without insurance can spend their savings 2 3 times faster than expected if long-term care is needed. 20% Mean Annual Withdrawal Rate from Portfolio 15% 10% 13% 5% 5% 0% Typical client Client experiencing care event without insurance Q10. What is the average annual withdrawal percentage (%) for your typical client taking retirement income from their investment portfolio? (454n) Q44. [SKIP IF DON T KNOW OR DO NOT USE THIS STRATEGY] Previously, you indicated that your typical client taking retirement income withdraws (INSERT RESPONSE FROM Q10) per year. If a client does NOT have a long-term care solution in place and experiences a long-term care event, what do you estimate that the new average annual withdrawal percentage from their portfolio will be? (424n) 42

43 Three out of five advisors say that families are often devastated by the cost of long-term care. I often see families that are devastated by the costs of long-term care 16% 60% agree 40% disagree 44% 32% 8% Agree strongly Agree somewhat Disagree somewhat Disagree strongly Q23c. How much do you agree or disagree with each of the following statements: I often see families that are devastated by the costs of long-term care? (500n) 43

44 APPENDIX 44

45 Demographics of Consumer Sample (1,012n) (weighted) AGE Millennials (After 1980) 32% Gen X ( ) 27% Boomers ( ) 29% Silent ( ) 12% GENDER Male 48% Female 51% Transgender <1% Do not identify as any of the above <1% SEXUAL ORIENTATION Heterosexual 94% Bisexual 3% Gay 2% Lesbian 1% MARITAL STATUS Married 54% Never married 28% Widowed 5% Divorced 11% Separated 1% RACE/ETHNICITY White/Caucasian 65% Hispanic 15% Black/African American 12% Asian or Pacific Islander 6% Native American or Alaskan Native 1% Mixed racial background 2% Another racial or ethnic category <1% REGION Northeast 18% Midwest 21% South 37% West 23% CHILDREN (including adult children) Yes 61% No 39% EMPLOYMENT Employed 62% Not employed 6% Retired 25% Student 2% Stay-at-home spouse or partner 4% HOUSING Own 68% Rent 27% Neither 5% HOUSEHOLD INCOME Less than $25,000 14% $25,000 to $49,999 22% $50,000 to $74,999 19% $75,000 to $99,999 14% $100,000 to $149,999 17% $150,000 to $199,999 7% $200,000 or more 7% INVESTABLE ASSETS Less than $25,000 24% $25,000 to less than $50,000 17% $50,000 to less than $100,000 15% $100,000 to less than $250,000 14% $250,000 to less than $500,000 11% $500,000 to less than $1 million 10% $1 million to less than $2 million 5% $2 million or more 4% 45

46 Profile of Advisor Sample (500n) BUSINESS MIX Investment-focused 59% Balanced 28% Insurance-focused 13% COMPENSATION MODEL Asset management fees 50% Commissions (insurance & brokerage) 45% Planning fees 5% NUMBER OF CLIENTS <100 23% % % % 751 1,000 3% More than 1,000 3% AUM Less than $1M 1% $1M to <$5M 5% $5M to <$25M 18% $25M to <$50M 21% $50M to <$100M 21% $100M to <$250M 20% $250M to <$500M 8% $500M to <$1b 3% $1b or more 2% PRACTICE STYLE Sole practitioner with staff 39% Team-based practice (3+ members) 34% Sole practitioner with no staff 27% CHANNEL Independent BD 45% Wirehouse 13% Regional BD 12% Insurance BD 8% Bank 6% Insurance Carrier 6% MGA/BGA 1% RIA (vol.) 8% Other 1% GENDER Male 81% Female 19% AGE % % % % % 75+ 2% 46

47 LincolnFinancial.com About Lincoln Financial Group Lincoln Financial Group provides advice and solutions that help empower people to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $253 billion in assets under management as of December 31, Lincoln Financial Group is a committed corporate citizen and was named one of the Forbes Best Employers for 2017, is a member of the Dow Jones Sustainability Index North America, and received a perfect score of 100 percent on the 2018 Corporate Equality Index. Learn more at: Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for alerts at About Versta Research Versta Research is a full-service market research firm, headquartered in Chicago, IL, specializing in customized strategic market research and public opinion polling. Learn more at: 47