Why LTC insurance is a better bet for women

Longer life expectancy, coupled with unisex policy pricing, boosts the value proposition for female clients

Aug 28, 2012 @ 3:22 pm

By Liz Skinner

Long-term-care insurance often is a better investment for women than men because they live longer and more often spend their final years living alone, experts said. It's also a better financial deal, at least for now.

“If you can only afford long-term-care insurance for one person in the family, you technically should buy it for just the woman,” said Carolyn McClanahan, a financial planner and physician.

In fact, two-thirds of the new claims under LTC policies last year were made by women, according to the American Association for Long-Term Care Insurance. The largest claim still being paid under an LTC policy, as of the end of 2011, was for a woman who has been receiving care for almost 15 years, for a total cost of $1.7 million, the association said.

Ms. McClanahan recently recommended that a couple who are both in their early 70s purchase a long-term-care policy only for the wife.

“It just didn't make sense for him because the cost of the policy didn't really give much benefit," she said. "But for her, it gave a very nice benefit because her [expected] longevity is much higher than his even though they are close to the same age.”

The policy also “gave him peace of mind to know that she was going to have money to be taken care of when he died,” Ms. McClanahan said.

The average life expectancy of a 65-year-old woman in 2009 was 20.3 years, compared to a man of that age who was expected to live 17.6 years, according to the Centers for Disease Control and Prevention.

“Long-term care and long-term-care insurance are really women's issues because women are the majority caregivers and, ultimately, the majority of the care recipients,” said Jesse Slome, executive director of the LTC insurance association.

He said women also get coverage for a discount, of sorts, because the policies are priced without regard to gender. Therefore, a single man and a single woman pay the same for a policy even though a man is statistically less likely to use it.

That pricing, however, could change in the future because some insurers are starting to look at distinct rates for the two sexes, Mr. Slome said.

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