High Net Worth Investors and Long Term Care Insurance
Long term care insurance isn’t for every one, and many wealthy investors seem to think they don’t need a policy. Even those with an extremely high net worth are ignoring long term care insurance, according to a new study.
High Net Worth Investors
According to a Spectrem’s Millionaire Corner study of wealthy investors, less than 40% have long term care insurance, and those who don’t say they have the ability to self-insure by other means. Of Ultra High Net Worth investors, those with a net worth of between $5 million and $25 million (not including primary residence), only 37% own a long term care insurance policy.
When the net worth declines, so does the percentage of people who own a policy. Among Millionaire investors, those with a net worth of between $1 million and $5 million, 33% have long term care insurance. And finally, among Mass Affluent investors, those with a net worth between $100,000 and $1 million, just 24% own a long term care insurance policy.
Long Term Care Insurance
Long term care insurance provides coverage for long term care, which is care received either at a nursing home, assisted living facility, or in-home by a home health agency. Among all American seniors, the percentage that owns a policy is extremely low, hovering between 10 and 12%, according to recent figures.
It makes sense that wealthier investors are more likely to have a policy because they can likely afford the premiums without having to alter their budget as much, but it is surprising that the numbers among investors are still relatively low. The reason these wealthy investors would pass on buying a policy varies.
Among those Ultra High Net Worth investors who don’t own a policy, 40% say they plan to pay for long term care with other savings and another 25% attribute the reason for not buying a policy to the high cost. 11% say their family history of good health leads them to believe they may have no need for the insurance, which has resulted in abstaining from purchasing a policy, while 7% say other important financial needs have kept them from buying such a policy.
Buying a Policy
Of the 63% of Ultra High Net Worth investors that don’t already have a policy, 69% indicated that they are unlikely or very unlikely to purchase a plan in the future, and the percentage rises along with age. Only 7% of Ultra High Net Worth investors without a policy plan to buy one in the future, and the majority of those are younger.
Among the younger Ultra High Net Worth investors, those aged 44 and younger, 32% indicated that they were likely or very likely to purchase long term care insurance in the future.
These investors received information about long term care insurance via a professional life insurance agent or provider most often, followed by a primary financial advisor, and lastly from family and friends. Read more about long term care insurance and how best to plan for your future care or if you would like a personalized quote of the top companies at no-cost, fill out this form and we will send you a comparison of the top rated policies for you to review at home.