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Get a deal on long-term care

By Jennie L. Phipps · Bankrate.com
Monday, October 28, 2013
Posted: 5 pm ET

Unisex pricing for long-term care insurance is disappearing, but there are still states where women can buy these retirement planning policies at the same price as men, says Jesse Slome, executive director of the American Association for Long Term Care Insurance, a trade organization.

Slome says that last spring, companies selling the most long-term care insurance policies began raising the price for single women an average of 40 percent to 60 percent. But because these increases have to be approved by state insurance commissions -- and that process takes a long time -- policies for women still are being sold at parity with men in roughly half of the U.S. Those states include Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Ohio, Maryland, Massachusetts, Missouri, Montana, New Jersey, New York, North Dakota, Rhode Island, South Carolina, South Dakota, Virginia and Wyoming.

Insurance companies justify charging women more because women account for two-thirds of all claims, Slome says. The Society of Actuaries, which studied women's usage of long-term care insurance, has suggested that couples only buy long-term care on the wife because women live longer than men and are likely to first care for their husbands and then spend their final years as widows -- possibly in poor health -- with no one to care for them. In those retirement circumstances, long-term care insurance can be a real blessing.

Slome disagrees. "You might take out a smaller policy on the man and a larger policy on the woman, but if you don't take something out on the husband, the risk is that the wife will spend a significant part of their savings and leave herself destitute at the end," he warns.

If a woman buys a policy now, will the price inevitably rise to the higher levels? Slome says probably not because state regulators limit cost increases on existing policies. Once you buy in at a lower price, what you pay is very likely to remain much lower than the cost of policies sold in subsequent years.

The best time to buy long-term care insurance is before you are old enough for Medicare, Slome adds. That's because Medicare recipients are eligible for an array of sophisticated -- and free -- preventive health care screenings. Long-term care insurers will expect you to take those tests, and they'll want to see the results because those tests can reveal conditions that make people ineligible to buy long-term care insurance. "The risk of being declined increases, so it's smart to buy while you can still qualify," he says.

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