Family Caregivers Need Financial Care, Too

By Susan Rupe InsuranceNewsNet

More than 43 million working-age Americans serve as unpaid family caregivers. Although so much of the financial services industry has focused its attention on those who need care, the population segment that provides care has its own set of needs.

Unpaid family caregivers are the focus of a LIMRA series focusing on the insurance and financial needs of those caregivers.

Why caregivers?

“Caregivers present both an opportunity and a challenge for the financial services industry because so many unpaid family caregivers trade off the opportunity to work for being at home and taking care of family members - children, spouses, parents, whatever it may be,” said James Scanlon, LIMRA senior research director. “So while caregivers don’t have to pay to have someone else take care of their people, at the same time they are sacrificing their opportunities to earn an income, to earn benefits normally associated with employment like health insurance and retirement savings plans, as well as access to a lot of other financial services associated with employment.”

With caregivers less likely to have income as a result of their responsibilities, “that’s going to put a lot of households in a precarious financial position,” Scanlon said.

Caregivers have complex financial planning needs, and they need help in making sure their caregiving efforts don’t put their families at risk.

Life insurance is one area in which caregivers are falling short, the LIMRA report said. Only 42 percent of caregivers own life insurance. Among “abundant caregivers” – those who provide care for more than 30 hours a week – only about 15 percent own disability insurance.

But with all the demands on their time and resources, caregivers are a tough market for financial professionals to reach, Scanlon said.

“The point of the study is that the financial service industry can use this information as a bridge, as a way to connect with that community to bring them out,” he said. “You have to go and find these people. You’re not going to find them the way you normally do through an employer or an income they’re earning. You need to draw them out with communications that speak to their needs and demonstrate an understanding of their challenges.”

Domino Effect

One message that can resonate with caregivers, Scanlon said, is the possible “domino effect” that the lack of insurance or planning can have on a caregiver’s family.

“It’s the importance of the caregiver’s own security because that is directly related to the security of their care recipients,” he said. “If the family member is depending on the caregiver for their sustenance and something happens to that caregiver, now you don’t have just one problem - you have two problems.”

“I think it’s an important message that caregivers need to hear.”

One finding from the LIMRA research that Scanlon said surprised him was that unpaid caregiving takes place in families of all income levels.

“It’s not happening only in families where they can’t afford to pay for care. It’s also happening in high-income families,” he said. “So a lot of people are providing care voluntarily, not just because they can’t afford to pay for it.”

Ultimately, having the right financial planning in place will give families options to have care provided in the way they choose, Scanlon said.

“You want to put yourself in a position where you have options and you can choose which path you want to go.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.