Men Pay 15% Less for Long-Term Care Insurance

NEW YORK (MainStreet) — Britt Minsky wasn't aware of the high cost of nursing care until her 80-year-old mother moved into an assisted living facility in Georgia a year ago. For $3,600 a month, Minsky's mother receives 24-hour nursing care, three meals a day and lodging in a dormitory-sized room that fits one person.

"Imagine how much it will cost when I am 80 years old," the 52-year-old said. Minsky has since begun exploring the possibility of purchasing a long-term care insurance policy that would cover her own costs of nursing care if and when she needs it.

"I'm realizing that planning ahead is necessary when you're aging if you want dignity and quality in retirement," Minsky told MainStreet. Without proper planning, paying for long-term care can be a devastating financial burden for adult children, because elder care can be just pricey as putting a teen through four years of college. The average annual cost for nursing home residency in 2013 was about $87,000. While the cost of long term care insurance dropped for men, it inched up for single women, according to the American Association for Long-Term Care Insurance (AALTCI) 2014 Long-Term Care Insurance Price Index. A $164,000 long-term care insurance protection policy costs about $925 a year for men compared to $1,225 for single women.

Although rates vary from insurer to insurer, women were charged higher premiums in 2013 overall, because they live longer than men.

"Women account for two-thirds of the $6.6 billion in claims paid by insurers last year," said Jesse Slome, director of the AALTCI. A healthy 55-year-old man can expect to pay 15% less for long-term care insurance coverage compared to last year, and a 60-year-old married couple faces a 7% increase.

"Adding an inflation growth option builds your benefits over time but it can double the base cost of coverage," Slome said. A policy with inflation protection is also known as a benefit increase rider, which increases benefits annually whereas a policy without inflation protection decreases in value on an inflation adjusted basis yearly.

"Insurers offer a variety of discounts and options that can enable an individual to reduce the cost of protection," said Tracy Russo, partner with the National Long Term Care Education Center. "Today there are more choices available for consumers to protect against the very real risk of needing care."

Russo notes that it's best to plan in your mid-40s to mid-60s, because qualifying for a long-term care policy is not guaranteed.

"For many Americans with extended health conditions, access to long term care insurance coverage can be challenging," said Bill Neugroschel, CEO of United Security Assurance. A full 25% of long-term care insurance applications between the ages of 60 and 69 were declined. The decline rate grew 44% for applicants between 70 and 79 years old.

Insurance companies that offer long term care insurance include GenWorth, John Hancock, Massachusetts Mutual and Mutual of Omaha.

"The typical difference in cost is around 80% but in certain cases one insurer charged 109% more than another industry leader," said Nicole Marchand, long-term care design specialist with HTA Financial Services in West Chester, Pa.

--Written by Juliette Fairley for MainStreet

Show Comments

Back to Top