MINNEAPOLIS--(BUSINESS WIRE)--The incidence and financial impact of elder financial abuse may be worse than previously thought, according to the 2016 Safeguarding Our Seniors Study* from Allianz Life Insurance Company of North America (Allianz Life®). Originally commissioned in 2014,** Safeguarding Our Seniors found that about 20% of family and friends reported knowing an elder who experienced financial abuse. The current study, which focused on family and friends in active elder caregiving roles, or those who could be soon, found that more than one-third of active caregivers (37%) said the elder they care for has experienced financial abuse or exploitation with a loss. Furthermore, respondents revealed that elder financial abuse is not an isolated occurrence, with a full 40% of all active and potential caregivers confirming that their elder has experienced financial abuse more than once.
To build a more comprehensive perspective on the issue of elder financial abuse and how to prevent it, the 2016 Safeguarding Our Seniors study surveyed 1,000 active and potential caregivers.*** In addition to providing insight about incidences of elder financial abuse, caregivers offered a clearer picture about the significant monetary costs of the abuse.
Respondents noted the average financial loss to victims was $36,000, 20% higher than estimated in the 2014 study, with nearly half of respondents saying the effect on the elder victim to be “major loss” or “financial ruin.” Equally troubling, nearly 90% of active and potential caregivers said they also experienced a financial impact from the abuse, with the average cost to them also reaching $36,000 – a direct result of having to compensate for their elder’s loss.
“It’s clear that elder financial abuse is becoming more commonplace, and unfortunately, it also appears to be greater than we thought in both scope and impact,” said Allianz Life President and CEO Walter White. “We’ve also learned that the damaging effects of abuse extend well beyond the seniors themselves to their caregivers. We believe the financial services industry, government, and the general public need to join forces to bring greater awareness to this issue and help reverse this troubling trend.”
Greater Risk with Mental Decline
The study results also show that elders with a mental decline are at greater risk, underscoring the need for more attention to the problem. Almost half (45%) of active caregivers say the elder they care for shows signs of dementia or a decline in mental abilities, with nearly three quarters (71%) classifying that decline as “moderate” or “severe.”
As a result, the frequency and financial impact are both greater for elders who have experienced mental declines. Incidence of elder financial abuse as reported by active and potential caregivers is 10% greater (34% versus 24% with no mental decline) and average reported monetary loss is 28% higher ($41,000 versus $32,000 with no mental decline).
Beyond Dollars and Cents: The Emotional Impact
Just as concerning as the substantial monetary loss, elder financial abuse also takes a significant emotional toll on its victims. Active and potential caregivers reported that their elder experienced a variety of emotions due to the abuse, including anger (36%), depression (34%), anxiety (28%) and guilt (25%). Perhaps most troubling, however, is the isolation that can occur after abuse. A full half of all caregivers said the financial abuse caused that elder to isolate himself/herself with a 15% increase in isolation for elders with mental declines (58% versus 43% with no mental decline).
Although many active and potential caregivers believe elders would report financial abuse if it happened to them, a third of those who believe the elder would not report the abuse believe their elder would remain silent due to embarrassment (44%), lack of awareness (40%) or not knowing who to tell (27%). In fact, a quarter of all caregivers said they discovered the abuse themselves or from someone other than the elder they care for.
“As our study indicates, elder financial abuse is a multi-layered issue, which highlights the need for a renewed focus on developing a wide range of strategies to protect our country’s elders,” noted White. “We believe involvement of a third party in financial management – whether another family member or experienced financial professional – can be a positive first step. Establishing a dialogue that this is a real issue with potentially devastating implications is also key.”
If you’re a family member or caregiver, here are some ways you can help protect yourself or loved ones in your life:
- Plan ahead to protect your assets and ensure that your wishes are followed
- Consult with a qualified financial professional or attorney before signing complex agreements or anything you don’t understand
- Build relationships with professionals who are involved with your finances – they can assist in monitoring for suspicious activity
- Limit your use of cash – using checks and credit cards leaves a paper trail
- Trust your instincts and feel free to say “no” – remember, it’s your money
To find more tips for prevention and red flags to watch for, check out the Preventing Elder Financial Abuse Tip Sheet from the Better Business Bureau, available at www.allianzlife.com/sos.
Committed to Finding a Solution
As a company, Allianz Life partners with community organizations to deploy its employee volunteers in the community to raise awareness of elder financial abuse. Working together with the Better Business Bureau, Allianz Life created the Safeguarding Our Seniors volunteer program that sends volunteers to senior or other community centers to educate and encourage discussion on the topic. To date, volunteers have made more than 70 presentations in and around the Twin Cities, reaching more than 900 seniors with valuable information about how they can protect themselves from financial abuse.
In addition to educating consumers about elder financial abuse, Allianz Life also developed the Preventing Elder Financial Abuse education course to help financial professionals understand the scope of the problem and provide simple steps they can take to help protect their clients. Available to financial professionals who work with Allianz Life, the Preventing Elder Financial Abuse course is one of many topics with support materials that Allianz Life offers to more than 20,000 financial professionals every year.
“Allianz Life remains committed to a leadership role in educating financial professionals, the community and employees about elder financial abuse prevention and how we can all be part of the solution,” concluded White.
About Allianz Life Insurance Company of North America
Allianz Life Insurance Company of North America, one of FORTUNE’s 100 Best Companies to Work For in 2016, has been keeping its promises since 1896. Today, it carries on that tradition, helping Americans achieve their retirement income and protection goals with a variety of annuities and life insurance products. In 2015, Allianz Life provided a total of $2.4 billion in benefit payments that supported policyholders’ financial objectives. As a leading provider of fixed index annuities, Allianz Life is part of Allianz SE, a global leader in the financial services industry with 142,000 employees in more than 70 countries worldwide. More than 85 million private and corporate customers rely on Allianz knowledge, global reach, and capital strength to help them make the most of financial opportunities.
*The 2016 Safeguarding Our Seniors Study was conducted in August 2016 with 1,000 panel respondents age 18-64 who are either actively providing care for a non-spousal elder age 65+, or could be in a position to provide such care within the next five years.
**The 2014 Safeguarding Our Seniors Study was conducted in March 2014 with 2,248 panel respondents ages 40-65+ (n=1,025 for adults ages 40-64 and n=1,223 for adults ages 65+) and was commissioned by Allianz Life Insurance Company of North America. Estimates for incidence of elder financial abuse were based on response of adults ages 40-64.
*** Active caregivers are defined as currently providing care for an elder. Potential caregivers are defined as someone who could be in a position to provide care to an elder in the next five years. A caregiver is defined as someone who provides financial, emotional or social support to a family member or friend age 65+.