According to a new report from Mintel, nearly three-quarters of Americans said they do not have long-term care insurance, and less than 60% of them are even familiar with the insurance offered. Furthermore, nearly one in five says they don't know why they haven't purchased coverage or say that they don't know anything about it.
"I don't think people understand what's involved with it. Or they don't think they'll need it, or that it will be covered by Medicare or Medicaid," Susan Menke, senior financial services analyst at Chicago-based Mintel, tells Marketing Daily. "A lot of people think they're not going to need it. ... Denial is a very powerful human survival strategy."
According to the research, cost is the primary reason that people don't purchase the coverage, with 42% saying the policies were too expensive. Other reasons included a belief that they won't ever need long-term care (17%), that it will be covered by Medicare or Medicaid (15%) or that they just simply haven't gotten around to it (13%). The research also found that women were more likely to have long-term care coverage than men.
"[Men] may be thinking their wives are going to take care of them," Menke says, noting that women are more likely to buy more insurance than men in general as well. "They're much more conservative about financial matters."
Either way, insurance companies need to do a better job of educating consumers--and their own agents--about why they might need such long-term care policies. "They need to make it top of mind somehow," Menke says. "They're just not getting out and talking to people as often as they should."
A straightforward message about the possibility of needing long-term care and how much it can cost without insurance would probably do the trick, she says. "The amount you would have to spend on long-term care when compared with what it costs to have a policy... It's a pretty easy sell when you show the numbers," she says. "With our increasing lifespans the odds of [needing] long-term care are going to go up as we get older."