Heads Up, Ladies

Ladies, HEADS UP!  No, there isn’t a foul ball coming into the stands or an errant golf ball careening towards your head.  But there is something occurring that will potentially affect your long-term health and care.  It involves long-term care insurance (LTCi). Yeah, I know, not the most popular or interesting topic.  But for women, what I’m telling you below is important- for you, your family, and your wallet.

Genworth, one of the 800 pound gorillas in the LTCi market recently announced some major changes to the policies it will be issuing going forward.  These changes will particularly affect single women, but also women in general.  The biggest change is a move to gender-based rates.  Traditionally LTCi policies have been priced gender-neutral, meaning men and women paid the same rate.  This is in contrast to how life insurance (men higher) and disability insurance (women higher) have been and are priced.  But it appears to be changing for LTCi.  And that’s not good for women.  But you can see their reasoning. Just go to an assisted living or skilled nursing facility and see who’s there.  It’s primarily women.  So women tend to cost more in benefits than men.  Therefore Genworth has decided to charge them more- and likely substantially more.  For now this pertains to new policies but we’ve been seeing increases in older policy premiums for both men and women.

There are other changes announced too (not a complete list either):

• A new emphasis on family history, which hasn’t been a focal point
• Redefining couples- and eliminating relatives so that two siblings living together in old age will likely no longer receive a “couples” or “spousal” discount
• 4% compound inflation rate vs. 5%

For now this applies to Genworth, but other companies are likely to follow suit- and perhaps quickly.  I’ve spoken to a rep for another player in this market who said he’s heard rumblings in his company that changes are coming to their policies too- perhaps some of the same ones listed above.  Men’s rates may not change much for now (we’d hope they’d go down if we don’t cost as much- but don’t hold your breath).  So if you’re a woman, particularly a single woman, and you’ve been contemplating LTCi, waiting may begin to have consequences.

As most of you are aware, my practice is fee-only so I don’t sell insurance policies.  But I do discuss it- a lot- with my clients.  I’m happy to have that discussion with you too as part of your overall financial plan. Just call 919.403.6633 for an appointment.