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Women Will Pay More for Long-Term Care Insurance
Long-term care insurance will soon be getting more expensive for women. The country's biggest provider of long-term care insurance has announced plans to introduce gender-based pricing.
Life insurance has long had gender-specific pricing, but long-term care insurance has always been gender neutral. This is changing now that Genworth Financial has decided to charge more for policies purchased by single women. Other insurers will likely follow suit. Genworth hasn’t said how much it will raise rates for women, but according to the American Association for Long-Term Care Insurance (AALTCI), women will likely end up paying 20 to 40 percent more than men.
The reason for the increase in pricing is that women tend to live longer than men and file more long-term insurance claims. About two-thirds of payouts for claims are made to women, according to the AALTCI. Not only do women claim more often, but they also live longer on a claim.
Genworth's new rates won't apply to existing policyholders or married couples who apply for joint insurance. Insurance companies usually give married couples a discount on rates. Genworth is waiting for approval from state regulators, so the new rates will likely go into effect throughout the spring and summer. Several other companies also have gender-specific pricing requests on file with state regulators. Unlike Genworth, the other companies may also charge more to a married woman who outlives her spouse. The increase in rates will be on top of recent rate hikes for long-term care insurance policyholders. Premiums in general have gone up between 30 and 50 percent over the past five years.
Gender-specific pricing can be controversial. The Affordable Care Act mandates gender-neutral pricing for health insurance policies, but it doesn't cover long-term care insurance. Customers in Colorado and Montana will not be affected by the new pricing because both states have laws requiring unisex rates.
For more information on the rate increase, click here.
For more information on long-term care insurance, click here.
Created date: 03/14/2013