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LIMRA INSIGHTS

Those Who Care For Others Need Financial Care

Caregivers, by definition, protect the ones they love. But who protects the caregivers? Since February includes both Valentine’s Day and Life Happens’ “Insure Your Love” campaign, it’s the perfect time to look at the needs of caregivers, as well as the people they love.

An unpaid family caregiver is anyone who devotes part of their time tending to the needs of family members who are unable to look after themselves. Caregivers include parents of young children, as well as adult children caring for aging parents or other relatives.

A recent LIMRA study of U.S. adults ages 18 to 64 finds that 36% (77 million) self-identify as unpaid family caregivers. Among these, 43 million are current caregivers.

Two-thirds of these caregivers have regular jobs. Among employed caregivers, 80% work full time.

Needing Financial Security

Caregivers have much higher levels of financial concern than do typical working-age adults. This is especially true for matters related to life insurance. Higher concern levels are also evident for financial risks related to disability and long-term care coverages.

Life insurance is an essential product for those with dependent family members. According to a LIMRA study, 30 million current caregivers do not own any life insurance, or do not have enough life insurance coverage. There are various reasons caregivers give for not having enough life coverage, including:

  • It is too expensive (45%)
  • Other financial priorities (27%)
  • Haven’t gotten around to it (23%)
  • Not sure how much I need (22%)
  • Not sure what type to buy (15%)
  • Don’t like thinking about it (12%)

Among caregivers who say they do not own life insurance, 87% say they should own it. This means that 11 million current caregivers believe they should own life insurance, but do not. Core protection products — such as life insurance, disability insurance and long-term care insurance — are essential to protecting both caregivers and their dependent family members.

In addition to feeling the need for life insurance, more than 75% of caregivers believe primary wage earners should own disability coverage, and that everyone should own long-term care insurance.

Disability insurance is important for caregivers, particularly if they are also wage earners. A disability can put the caregiver and the person they care for at risk and can affect people at any point in their career. In fact, according to LIMRA research, more than 25% of today’s 20-year-olds will be out of work for a year or more due to a disability before they reach retirement age.

Disability insurance ownership among caregivers is 17%. The gap between attitudes and behavior regarding disability insurance, however, is larger than with life insurance. In all, 68 million caregivers believe they need disability insurance coverage. This includes 63 million who do not own disability insurance, and 5 million who do not have enough coverage.

Caregivers appear to be more sensitive to the need for long-term care insurance than for life or disability insurance. In all, 4 million current caregivers own LTCi. Another 39 million caregivers do not own LTCi, or do not have enough coverage.

The high levels of financial concern in the caregiver community suggest a desire for financial solutions. Yet, according to LIMRA research, only 22% of caregivers have a primary financial advisor (compared with 37% of consumers overall). This suggests a wide opportunity for financial advisors to fulfill this unmet need.

Caregivers provide support out of love and duty. They may benefit from the help financial professionals can provide with regard to ensuring that care will continue to be provided, even if the caregiver’s ability to do so changes.

James T. Scanlon, MS, HIA, is a senior research director of insurance research for LIMRA, focusing on insurance product and service marketing. Jim may be contacted at [email protected] .


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