Aged care insurance a hard sell
Insurance policies for aged care would be a good way of helping Australians fund their needs in later life but would be a hard sell to consumers, a new report says.
Insurance policies for aged care would be a good way of helping Australians fund their needs in later life but would be a hard sell to consumers, a new report says.
The report entitled Long Term Care Insurance: A Survey of Providers’ Attitudes, was commissioned by the consumer lobby group for the over 50s, National Seniors Australia.
The report’s author, Bridget Browne of Australian National University, late last year surveyed and interviewed life insurers and major financial services providers and consultants active in the Australian market.
Nearly three quarters (73%) said private voluntary insurance covering long term care needs could be a worthwhile product in Australia in line with those offered in some countries overseas.
Dr Tim Adair, director of the National Seniors Productive Ageing Centre, said insurance for aged care was not something that would happen overnight and the concept would need considerable public awareness before being introduced by governments or industry.
“Over a lifetime, people face enough pressures to provide for themselves and their families, without worrying about aged care insurance as well,” Dr Adair said.
“Many people also believe they have no need of it, due to the government funded annual and lifetime caps on their contributions to aged care.
“Those with the means to afford such insurance are also more likely to be able to fund their own care anyway.”
A survey of National Seniors’ members on aged care reform in 2011 found most believed they should contribute to their aged care costs but rejected the idea of selling the family home to fund it.
Some of the key barriers to the development of aged care insurance in Australia according to the report are:
• A lack of consumer awareness of future care needs
• The unpredictable nature and extent of future care needs
• Complexity and high cost of care insurance products
• A belief that long term care is funded entirely by the state
• Limited market profitability due to current market size
• Regulatory constraints or regulatory uncertainty
• Uncertainty over future costs of long term care provision
Ms Browne presented the survey findings yesterday at the 2013 Actuaries Summit at the Hilton Hotel, Sydney.
