With America’s elderly population expected to double in the coming decades, the demand for caregiving services will be higher than ever before. According to the National Association of Insurance Commissioners, 15 million Americans are expected to have a high long term care need by 2050.1
Do the loved ones of these millions of Americans—potential primary caregivers—understand what could be to come?
Securian Financial recently conducted a survey of more than 800 people currently providing, or who have provided, unpaid care to a parent, in-law or spouse who is aging, or has a disability or chronic disease.
The survey found the majority of caregivers (60 percent) spend more than 10 hours per week caring for a family member, and about one in four (29 percent) spend more than 20 hours per week. Women (32 percent) are more likely than men (26 percent) to spend more than 20 hours each week on caregiver duties.
More than half (55 percent) of caregivers characterized their role as “supportive.” However, one-third indicated they feel “concerned” (33 percent) or “overwhelmed” (32 percent) by their caregiving responsibilities.
The most difficult aspects of life for caregivers to maintain are emotional stability (60 percent) and a healthy balance between the time they spend caregiving and with immediate family members (56 percent). Other areas caregivers struggle with are keeping up with day-to-day tasks (54 percent) and maintaining their own financial well-being (52 percent), with one in six people (17 percent) finding it very difficult to sustain their financial well-being.
“As the primary caregiver for my mother who is battling Alzheimer’s disease, I know firsthand the emotional and financial burden of caring for an aging parent while raising two young children and having a full-time career,” says Kim Anderson, a product research manager for Securian Financial.
Financial impact of caregiving responsibilities and long-term care costs
Families frequently shoulder the time and cost burdens associated with caregiving duties, and once the level of care required goes beyond the capabilities of immediate family members, the affordability of long term care can be out of reach for many.
“In January, my mother’s health declined considerably and we made the difficult decision to move her into a skilled memory care facility,” says Anderson. “To help cover the steep costs of this high level of care, my father moved in with my family.”
Traditionally, many people have purchased stand-alone long term care insurance. Unfortunately, the costs of long term care are on the rise, and the stand-alone long term care insurance market has undergone significant changes.
Numerous insurers have stopped offering stand-alone long term care insurance entirely, and most of those that have stayed in the market have increased premiums substantially. In 2000, there were 125 insurers offering stand-alone long term care insurance, according to the National Association of Insurance Commissioners. In 2014, there were less than 15.1
Forty-eight percent of the caregivers participating in Securian’s survey say the person they are caring for does not have long term care insurance. Those who care for a family member for more than 20 hours per week are the least likely (34 percent) to say their care recipient has long term care insurance.
Cost is the number one reason why people do not purchase long term care insurance. Half of caregivers (50 percent) whose care recipients do not have long term care insurance believe it is too expensive for their recipient, while another 10 percent do not think it is a worthwhile investment.
Caregiving affects job performance
Securian’s survey also found that caregiving often impacts an individual’s career and earning prospects.
Half (50 percent) of those who held jobs while they were a caregiver say it affected their job performance, with the most common impact being the need to take days off from work (41 percent).
In addition, more than one-fifth of caregivers (22 percent) say their hours or responsibilities at work were reduced due to their caregiving commitment. Moreover, 15 percent of employed caregivers had to take a leave of absence from work, and 12 percent said they quit work altogether because of their caregiving responsibilities.
“The financial burden of missing extended periods of work to provide care for a loved one is a struggle for many,” says Anderson. “In our survey, 28 percent of the people providing care for a loved one who has long term care insurance said the fact that the insurance doesn’t cover their own expenses as a non-compensated caregiver is challenging.”
Options to pay for long term care
In addition to stand-alone long term care insurance, other insurance options designed to help pay for long term care include life insurance and annuity policies with long term care funding riders, and hybrid policies combining life insurance with long term care benefits. Self-funding (i.e., paying out-of-pocket) is the most common way Americans pay for long term care,2 and Medicaid is an option for care recipients with depleted assets.
About the survey
Securian’s survey was conducted online by KRC Research from February 14, 2018 to February 21, 2018. A total of 816 U.S. adults age 18 and older answered questions about their role as a caregiver, challenges they face and long term care insurance. The sample was weighted by demographics such as age, gender, race, region and income to ensure reliable and accurate representation of the national population age 18 and older.
Since 1880, Securian Financial Group and its affiliates have provided financial security for individuals and businesses in the form of insurance, investments and retirement plans. Now one of the nation’s largest financial services providers, Securian is the holding company parent of a group of companies that offer a broad range of financial services.
References:
National Association of Insurance Commissioners, “The State of Long-Term Care Insurance: The Market, Challenges and Future Innovations,” May 2016.
U.S. Department of Health and Human Services, “Long-Term Services and Supports for Older Americans: Risks and Financing Research Brief,” July 2015 (revised February 2016).
