Women facing higher long-term care policy costs this year
Posted on 14 February 2013
By Mark Miller
Permanent URL of this article: http://retirementrevised.com/money/women-facing-higher-long-term-care-policy-costs-this-year
The gender gap is about to get a little wider as the formerly egalitarian long-term care insurance market starts charging higher prices for women.
While life insurance has long been priced by sex, companies that provide long-term care insurance (LTCI), mainly used to cover healthcare expenses in old age or for severe illness, have long avoided it. But for the first time this year, they will introduce gender-based pricing, starting with policies from Genworth Financial Inc, the nation’s largest seller.
The aim is to reflect actuarial realities – women live longer and prepare ahead more for their futures by buying policies. And overall, women account for well over half of all policy sales.
Genworth will introduce gender-specific policy pricing by this spring, if the plan passes regulatory hurdles. That will boost the cost of new policies for women by 20 to 40 percent, depending on the applicant’s age and benefit package, according to the American Association for Long-Term Care Insurance (AALTCI).
A Genworth spokesman stresses that the pricing will be applied only for women applying on their own – 10 percent of its policy applicants. The company will continue to offer lower rates to married couples who purchase joint coverage, and the changes won’t affect current policyholders.
Industry experts expect gender-based pricing will be adopted by other carriers before the end of this year – both for individuals and married couples.
