Paying for Senior Care: Women vs. Long Term Care Insurance

More companies are rolling out gender-based pricing policies for long-term care insurance. Why the change in rates, and is there any way to minimize LTCI costs?

Women and long-term care insurance

Women live longer than men—81 years on average, 76 for men – in the U.S., according to data released in 2013 by the Institute for Health Metrics and Evaluation. And it looks like women are going to be paying the price for that extra longevity. The Wall Street Journal‘s MarketWatch recently reported that women who apply individually for long-term care insurance will soon see rates that are 20% to 40% higher than they currently are. Genworth, the nation’s largest LTC insurer, will be rolling out this increase in April in about 30 states, and other industry competitors are expected to follow suit this summer.

The Reasoning Behind Higher Insurance Rates for Women

Why are insurance companies raising women’s rates? Part of the answer has to do with longevity. As noted above, women live longer; the same study also found that increased longevity translates to more unhealthy years on average for women—11 years, compared to 9.7 for men (MarketWatch). Of course, both men and women suffer more from health disorders after age 55, but women are less likely to seek adequate treatment for some issues, like high blood pressure and high cholesterol.

All of this means that women utilize long-term care and LTCI insurance very differently. Women account for 70%-to-80% of LCTI claims, according to the MarketWatch article, and they are more likely to live alone in older age or to be a caregiver for their spouse. Conversely, women who need care themselves in old age are less likely to have a family caregiver, which may further increase their potential expense to the insurance company. Married couples who apply for coverage jointly will still receive a substantial discount—when one half of a couple gets ill, often the healthy spouse takes care of the sick one, so the cost to insurers is lower. But if a woman loses her spouse, she’ll also lose his discount, and her rates will increase.

What Can Women Do to Minimize the Costs of Paying for Senior Care?

Long term care insurance is not for everyone. Fortunately, there are other options for financing senior care, such as Veteran’s benefits and life insurance policies with a long-term care rider. The bottom line, though, is retirement planning and preparing for long term senior care pays off. If you already know you’re interested in LCTI, now’s the time for women and married couples to consider buying a policy.

For women who do plan to apply for long-term care insurance, experts suggest that you apply as soon as possible so that you don’t get caught in the rate increase. Couples should also consider buying a policy while married, in order to get the benefits of the couples discount.

“Women have the greatest need to do some long term care planning, but the opportunity to take advantage of currently available low rates will end soon,” says Jesse Slome, executive director of the American Association for Long-Term Care Insurance, in a press release. Slome also suggests being a “prudent shopper,” making sure your insurance agent has plenty of experience with LCTI and is able to help you do a cost-benefit comparison with multiple insurers.

Paying for Senior Care: Women vs. Long Term Care Insurance by Sarah Stevenson