Some of the nation’s leading insurers are filing new long term care insurance (LTCI) policies that use sex-distinct pricing. That could result in women paying 20 percent to 40 percent more than comparable men.
LTCI carriers suspected all along that women were likely to live longer than men and consume more formal long-term care (LTC) services than men.
LTCI carriers now know that women account for two out of every three LTCI claim benefit dollars paid out, and that single women alone account for about 41 percent of all LTCI benefits paid out.
The carriers have, in effect, been giving women — especially single, divorced and widowed women — what amounted to a significant price advantage.
At the carriers shifting to sex-distinct pricing, that advantage will be ending soon.
This change is of special interest to female clients ages 55 to 65, who are likely to be old enough to understand the need for LTCI coverage and healthy enough to qualify for coverage.
At the American Association for Long Term Care Insurance (AALTCI), we’ve been trying to get this message out to insurance professionals. I’ve been writing about this issue in communications to AALTCI members, and putting it in press releases aimed at publications that could reach other agents, brokers, consultants and financial advisors.
Given who the readers of this site are, you may already have gotten this message through AALTCI publications or through articles based on the press releases. If so: You no doubt already are doing your best to educate female clients and prospects about the coming pricing shift.
If not, keep in mind that all insurers are watching the insurers that have reported filing new policies using sex-distinct rates. Insurers that resist the trend may find themselves underpricing the market. That practice might seem beneficial to women in the short run but could to problems in the long run.
But, for now, while unisex prices prevail in the market, this may be a good opportunity for women to take advantage of the disappearing price advantage.
When you are talking to women who are thinking about LTCI coverage, explain that women live longer, have a greater risk of needing long-term care, and, indeed, initiate two-thirds of all new claims started each year. LTCI will end up costing more for women because they’re likely to need it more.
When you are talking to married women, make sure they understand that women are much more likely than their husbands to live into their 80s and 90s, and much more likely to end up needing LTC services.