Will AI provide in-home long-term care?

Less than a year since the launch of the artificial intelligence chatbot ChatGPT, Americans are embracing AI-based care as they age. One-third of Americans and more than half of millennials believe AI and robotics will provide their future in-home long-term care, according to the annual Nationwide Retirement Institute Long-Term Care Survey.

Conducted in partnership with LIMRA in May, the survey of 1,439 U.S. adults aged 24 or over found that younger generations were particularly apt to embrace the technology.

Among the survey’s key findings:

• Daily functions: More than one in three Americans (35%) would accept help from a robot for activities such as toileting, dressing and transferring. This rises to 52% among millennials and declines with older generations (23% for baby boomers and 36% for Generation X).
• Companionship: Nearly the same percentage (32%) said they would talk to robots/AI if they are feeling lonely. This increases to about half (52%) of millennials.
• Physical safety: Almost seven out of 10 Americans (68%) would use AI to alert family or friends if they were to experience a fall or physical danger (63% of boomers, 70% of Gen Xers, 72% of millennials).
• Medical history: Nearly half (48%) of Americans said they would share their medical history with AI to help support their care needs. This percentage increases to 65% for millennials.

In response to the increasing acceptance and adoption of AI-based care, Nationwide said that it is testing eldercare robots in homes of select policyholders who have mobility issues. The goal of this trial is to assess if the robots increase the potential for policyholders to age in their home and remain independent.

“It is difficult for many families to find quality care for their loved ones. We are considering AI and robotics as potential solutions for this and are identifying if eldercare robots could become credible, compelling examples of extraordinary care for our members,” said Holly Snyder, president of Nationwide’s Life Lnsurance business. “As we continue to see advancements in AI and an uptick in consumer adoption, AI and robotics could permanently change how people receive their long-term care and provide them with more opportunity to safely remain independent for longer.”

AI implications for agents

As artificial intelligence continues to emerge and change every day, it is hard to predict exactly what things will look like 10 or 20 years down the road, said Snyder, in discussing the implications for agents who are selling long-term care insurance. “That’s why I recommend that agents and financial professionals work with their clients to build a plan that provides the flexibility to access tools, services or resources that haven’t even been created yet,” she said. “That means adopting solutions that give clients the discretion to decide what will work best for them. Nationwide has been leaning into the development of next generation cash indemnity LTCi solutions like CareMatters Together, which provides the client with tremendous flexibility in determining how to use their benefits to meet their specific needs – even if it’s adopting a resource that we can’t imagine today.”

Mistaken beliefs

The survey also revealed that 18% of adults reported that they currently own LTCi, including 27% of millennials. However, industry data show that only 3.1% of Americans have purchased LTCi and most of those are older consumers.

More than half (51%) who mistakenly thought they owned long-term care insurance confused it with long-term disability insurance and almost one-third (30%) confused LTCi with health insurance.

In conjunction with the survey, Nationwide conducted focus groups made up of four different demographics: baby boomers, Gen Xers, millennials and those who believe they had long-term care coverage. Unsurprisingly, these sessions revealed that like survey respondents, focus group participants also often mistakenly confused long-term care insurance with their long-term disability insurance or health insurance. Neither of these products cover long-term care expenses.

“Many Americans – mostly millennials – mistakenly believe they have long-term care coverage, usually in their company’s benefit package, when in fact they do not,” said Snyder. “Although this misconception is understandable, it puts them at danger of discovering that they don’t have coverage much later on when they really need it.”

Americans’ concerns about managing aging

Though many Americans don’t own LTCi policies, they do have very real concerns about how to manage the aging process and its associated costs, according to the survey.

For example:

• Nearly half of respondents (49%) are worried they'll become a burden to their family as they age.
• Almost one-third (28%) say they would rather die than live in a nursing home.
• More than one-quarter (26%) believe paying for long-term care will diminish their children's inheritance.

Bringing up LTC planning

Although more than half (51%) of the respondents said that it is important that a financial professional discuss long-term care costs with them, fewer than one in five adults (18%) said that they have actually discussed long-term planning with their financial professional, according to the survey.

In fact, more than one in four adults (27%) across all age groups have not discussed LTC costs with anyone. The good news, the survey noted, is that 30% said they would discuss LTC costs with a financial professional in the future.

Why more Americans are not buying LTCi 

The survey highlights once again the small number of consumers who have actually bought LTCi. The reasons for this are many and varied, as explained by Tom Riekse, managing partner of LTCI Partners. As the Nationwide/LIMRA survey results demonstrate, he said, there continues to be real confusion about what LTCi is and what it does.

A significant number of people think that long-term care is covered by their long-term disability or health insurance policy. Or they will make the common mistake and assume that Medicare will cover the costs.

If they do express interest in LTCi, Riekse added, they assume it is too expensive for them. They may read a statistic about what the average premium is and think that’s what they will have to pay instead of finding a plan that fits their budget.

Finally, it is challenging for someone to compare all the different types of LTCi out there --traditional, hybrid, life with rider, annuity with rider - Riekse said. But consumers can compare other financial services such as credit cards, Medicare plans and health plans.

“So, without the hands-on assistance of a licensed agent, this is a difficult product to purchase,” he said.  “And there probably aren’t enough financial security professionals around to handle the needs.”

Starting the conversation

What can agents do to get the LTCi conversation going?

“Well, they can first work with any current or past clients to make sure they understand their existing LTC benefits – if they do own policies,” Riekse said. “This may uncover opportunities to supplement or enhance coverage.”

Next, they need to continue to educate everyone about the need to plan for care, he added. Many carriers and brokerage general agents can provide support for consumer education, including live seminars or webinars.

Finally, they need to take a fresh look at the current portfolio of products, which has changed a lot in the last few years.

Finding success

For financial professionals looking for success in selling LTCi, Snyder recommends that they include LTC planning as part of a broader retirement planning discussion. That would include topics like planning for retirement income, health care expenses and taxes, when to claim Social Security, leaving a legacy for their loved ones, and finally, the end of their life.

“Help them see the bigger picture and the advantage of planning ahead to ensure the retirement they want for themselves and their family,” she said.

Some clients may come to the table feeling as though it’s not something that they will ever need. However, she added, we know that’s not the case, given that 70% of people over the age of 65 will need some form of long-term care.

“I recommend you approach it as helping them prepare for a ‘just in case’ scenario,” she said. “Have a conversation about what they want to happen if they do need care. Do they want to stay in their home? How will their family be involved? Don’t engage in scare tactics – keep it proactive and positive.”

The 2023 Nationwide Retirement Institute/NCOA Long-term Care survey was conducted online within the United States between adults aged 25 and over by LIMRA on behalf of The Nationwide Retirement Institute. Survey participants were drawn from a nationwide consumer panel and data collection occurred between 4/25/2023 and 5/12/2023.

Ayo Mseka has more than 30 years of experience reporting on the financial-services industry.  She formerly served as Editor-In-Chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].

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Ayo Mseka has more than 30 years of experience reporting on the financial services industry. She formerly served as editor-in-chief of NAIFA’s Advisor Today magazine. Contact her at [email protected].