While life insurance has long been priced by
sex, companies that provide long-term care insurance (LTCI), mainly used to
cover healthcare expenses in old age or for severe illness, have long avoided
it. But for the first time this year, they will introduce gender-based pricing,
starting with policies from Genworth Financial Inc, the nation's largest
seller.
Long-term care is rapidly becoming
one of the most important matters of financial security and asset protection. As
a result, long-term care insurance (LTCi) is becoming more complicated and increasingly
pricey.
Apparently, women should not
delay when it comes to assessing their long-term care needs as LTCi policies
start ratcheting rates up on the longer-living sex. This development was
explored by Reuters in a recent
article titled “Long-term care policies will soon cost more
for women.”
Gender has long been a factor in
the pricing of insurance policies, and always for very actuarial reasons. Why?
Because women tend to live longer. Still the market for LTCi policies is trying
to find its footing. As a consequence, at least one insurer is going to follow
the actuarial numbers to higher rates.
Genworth Financial Inc., the
largest seller of these LTCi products, announced that it will introduce new
rates for new policies procured by women individually by as much as 20 to 40
percent. Note: for now, rates won’t increase on married couples purchasing the
same policies and so that’s an important caveat, and strategy, if applicable.
This latest development is just
one more reason why planning is important. It remains to be seen where the
market will lead these policies, so do your homework to know what makes sense
for you.
Reference: Reuters
(February 14, 2013) “Long-term care policies will soon cost more
for women”
Comments