Gender-specific Pricing for LTC Insurance

March 2013

Since the inception of modern long term care insurance, premiums have been the same for men and women of the same age and rate class.  That will change soon for many individuals:  already, at least one leading long term care insurance company has begun the process of filing for gender-specific pricing.   This move provokes two obvious questions:  how soon we can expect to see these changes, and by how much will premiums increase?  Although there’s no definitive information on either of these issues yet, here’s my analysis of the situation:

How soon?  The only accurate answer is, “It depends.”  Industry insiders’ best guess is April-May of 2013. The uncertainty derives from the fact that the filing of prices on new (yet-to-be-issued) policies is a patchwork-quilt process.  Each state’s insurance division must give its OK for the individual policies sold in that state.

How much will policy premiums change?  It’s estimated that pricing will rise by as much as 20-40% on premiums for women over the equivalent policies for men.  Presumably, the price for men will drop (again, there will be no certainty until the new prices are either announced by the insurers or made public by the states’ Divisions of Insurance).

Keep in mind:

1)            Existing in-force policies will not be impacted by gender-specific pricing.  Only new policies purchased after the pricing change has occurred will be affected.

2)            Not all insurers are moving to gender-specific pricing at this time; this state of affairs will heighten the importance of working with an independent specialist who represents multiple insurers.

3)            Females who may at some point in their lives want to have long term care insurance are encouraged to look into coverage NOW, in order to enjoy the widest selection of favorably-priced coverage.

Since women live longer than men — usually outliving their husbands — they use more professional caregiving and use long term care insurance for longer durations than do men.  As many insurers move to re-price future policies to reflect this reality, there ‘s now a window of opportunity for women to lock in pricing that in the not-too-distant future may be described as “the good old days of low premiums for women.”