Financial advisers fail to predict long-term care costs
Many elderly in the United Kingdom face long-term care money shortfalls because their financial advisers have miscalculated how long they will live, according to new research.At least 34% of people in nursing homes using investment-backed products could run out of savings within 55 months of entering the facility, according to researchers. The problem is that most long-term care investment products are designed to pay out for only a certain number of years and the policyholders could outlive that period.
Advisers estimate costs based on the assumption that people will live for four years in a long-term care setting. But no one is average and there are a great number of people who live for many more than four years in a nursing home. Partnership Assurance, a British firm that sells insurance and other investment products, conducted the research in conjunction with actuaries Watson Wyatt.