Ladies' Only "Sale" on Long Term Care Insurance

January 15, 2013

Carmel, CA

Long term care planning has long been described as a woman's issue.  Women live longer than men, and are much more likely to outlive their spouses.  This means they're also much more likely to benefit from the purchase of long term care insurance than men.

So it shouldn't come as a big surprise that some leading insurers have revealed they're planning to make policy pricing sex-distinct.  That method has long been in use for life insurance, where women's relative longevity has resulted in their benefiting from being charged lower premium prices than men. 

Ending unisex pricing in long term care insurance means that premiums will be more expensive for a woman purchasing the coverage. 

How much more expensive, you ask?  We won't know until the required premium rate requests have been filed with the various states' Departments of Insurance, but some experts are projecting 20-30%, or even 40% price hikes!

Assuming the prices for men drop correspondingly, the total price for a couple will remain unaffected at first.  That is, until the husband passes away (actuarially, the husband usually pre-deceases the wife), at which point his wife will be left paying a higher premium than would've been the case if she had bought a policy under unisex pricing.  An important note: some policies offer a waiver of spousal premium upon the death of an insured, which can be a tremendous financial benefit for the survivor.  

The takeaways are crystal clear:

Single women - Single women should run, not walk, to buy long term care insurance now.  A delay could literally cost a woman hundreds of dollars (or more) each year!  This additional premium could have been easily avoided by simply buying coverage while unisex prices were still available. 

Couples - Couples buying long term care insurance are unlikely to experience a large price difference if sex-distinct pricing goes into effect before they purchase their policies.  However, the wife will likely benefit from having bought a unisex policy while it was still possible, if her husband predeceases  her.

Single men - Future premium prices for the single male applicant may drop when some or all insurance carriers selling long term care insurance adopt sex-distinct pricing. A smart strategy is to lock in coverage as soon as possible; later, if prices on policies drop as a result of the modified pricing, you can request or apply for a new policy - assuming your health has not declined.  By paying premiums on a monthly or quarterly basis, you can avoid having to wait for a refund on the initial policy.