Below is an excerpt from a NY Daily News article on the increasing Long-Term Care Insurance Premiums.
Attention all the single ladies: Insurance companies are hiking premiums on your long-term care insurance policies.
If you’re a single female in the New York area who is considering buying this kind of insurance that covers nursing home stays and home health aides, you probably want to do it now – if you can afford to, that is.
Nationally, premiums for policies for single women rose 12% in 2013, while rates for single men declined 14%, according to a report out Tuesday from the American Association for Long Term Care Insurance (AALTC).
That means a 55-year-old single woman would pay an average of $1,225 annually for the same level of benefits available to a single man for $925, the trade group said.
Insurance companies started to roll out higher premiums for women last spring. The reason: with women living longer than men, two-thirds of long-term claims are being paid out to females.
“It’s about longevity,” AALTC’s director, Jesse Slome, told the Daily News. “Single women are more likely to go on claim.”
Most long-term care policies, between 70% and 80%, are bought by couples, Slome noted.
But that’s little comfort to single women who are facing already-high premiums for a product that is becoming increasingly unaffordable.
Currently all but 16 states and Washington, D.C., have adopted sex-distinct rates, charging more for women. New York and New Jersey still have unisex pricing but that will change soon.
Genworth Financial, a leading long-term care insurance carrier, has received approval from the New York Department of Financial Services to use gender-based rates in New York, and that product will be launched in the near future, Genworth spokesman Tom Topinka told the News.
Other insurance companies are expected to follow suit.
“If you were thinking about buying it, it’s probably better to do it sooner rather than later,” Henry Alter, a long-term care specialist based in Kew Gardens, Queens, told the News.
Premiums for couples increased modestly by 3%, according to the report.
The study also found big price gaps among carriers for comparable products, ranging from 31% to as much as 114%.
“One insurer will literally charge more than double for virtually the same level of benefits,” Slome said.
The rising cost of policies might deter single women from purchasing long-term care insurance. But that could be a mistake, given the high cost of long-term care, especially in the New York area.
The annual cost of a private room in a nursing home in Manhattan is a mind-boggling $180,000 a year, according to Genworth’s most recent annual Cost of Care Survey.
“We encourage people to lock in their current health and age,” Alter said. “This is so important, even though the cost is high.”