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Retirement Planning > Retirement Investing

Put LTC Insurance In Boomer Women's Retirement Plan

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Proper planning and better financial decisions are crucial for women of all ages, and each age group has distinct needs based on where they are in their life’s journey.

For millions of boomer women, one of the top concerns is the availability and affordability of health care and LTC services. While the average nursing home stay is 3 years, women are likely to stay longer than men, and single residents stay twice as long as those who are married. There is a 72% likelihood that a woman will need long term care services sometime after age 65, according to the AARP.

However, only 18% of women who responded to a recent Prudential Insurance study on the financial literacy of women have talked with their spouses or partners about LTC insurance. And, while it is known that most women do not want to be a burden on their adult children, about 75% of respondents have not had serious discussions with their children about LTC insurance.

We also know that women not only provide but also receive the majority of LTC services. During a woman’s lifetime, she will very likely give care to other family members and is also likely to receive care–especially at the end of her lifetime and at substantial cost. Census Bureau statistics show that with life spans an average of 7 years longer than men, and incomes an average 23% lower, many women are going to need LTC services but may not have the resources to pay for them.

Financial advisors and planners, therefore, must impress on women clients that they need to plan for their own long term care. Without proper preparation they could ultimately become a burden to their family.

Some 33.9 million people are caring for someone 50 or older in America, according to a study by the National Alliance for Caregiving and the AARP. Most of those care recipients still live in their own homes, while the second largest number live with a caregiver. In either case, they are likely to be cared for by a family member, even if that family member lives far away.

In home settings, women are caregivers 80% of the time, assisting aging or disabled family members with bathing, dressing and other activities of daily living. Women also shop for groceries, do household chores, prepare meals or give medications.

For women in the emerging sandwich generation, the challenge is even more exhausting: They must mind children under age 18 while caring for aging family members, manage a household, and often, perform a full-time job. Whether she is a wife, mother, daughter, sister, niece, or friend, a dual caregiver is in a situation that is both emotionally and physically difficult.

Dual caregiving takes a toll on women’s work time and wages as well as opportunities for promotions or professional training. Thus, caregiving affects their earnings, their productivity and ultimately their quality of life.

In the end, when a woman needs LTC herself, the quality of care received and the ability to finance that care are a critical concern–and a key issue for the financial planner who is serving her needs.

The traditional options considered to assist with LTC have been private health insurance, Medicare, Medicaid, personal savings and assets, a spouse or partner, parents, children, or friends. Often, however, these options are limited or unavailable.

This is where LTC insurance comes in. Its protection allows the client to select care in various settings, including at home, for as long as possible.

Another key selling point that appeals to many female boomer clients is that LTC insurance takes the full burden of care off loved ones by providing access to agencies that set up a plan of care, including caregivers and discounts at local facilities. Women can even take advantage of some plans that pay family members to give care to each other.

LTC insurance also protects the savings and assets that have been accumulated over a lifetime, helping boomer women maintain both personal and financial independence. As America moves away from traditional forms of support, including those offered by the government, LTC insurance has evolved into a tool for self-reliance. For boomer women, then, buying LTC insurance for their parents and themselves is a vital part of financial planning.

An advisor who is not focused on women when selling LTC insurance is making a big mistake. Unmarried women, wives, daughters and mothers are the primary drivers in this area. That’s due, at least in part, to the fact that women are the most affected by LTC issues. Single women especially are vulnerable and at significant financial risk if they are unprotected by LTC insurance.

Don’t forget to point out to your women clients that LTC insurance rates are unisex. Policies are priced so that at the same age, men and women pay the same premium–even though women on average cost significantly more to insure. (The American Association for Long-Term Care Insurance notes that LTC insurers pay $2.50 in benefits for claims from women for every $1 they spend for men.)

Thus, while LTC insurance is an essential option available for baby boomers in general, it has a special appeal to women. Statistically, they are more likely than men to find themselves in need of it as they shift into retirement. The goal is to maintain their choices in the types of care received, in the event a need for LTC arises.

Thomas Riekse Jr. is a managing principal at LTCI Partners LLC, Libertyville, Ill., a nationwide brokerage agency. He can be reached at .


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