Two major carriers in the industry have begun rolling out policies with rates at least 40% higher for individual female policies than for individual male policies; other companies are expected to follow suit within months. The changes, which reflect the reality that women live longer and file more claims than men, complicate an already confusing market that’s diminished in recent years as carriers have exited the business.
Genworth, the biggest writer of long-term care insurance policies, and rival John Hancock have both introduced gender pricing across many states. As the new policies hit the market, they replace the prior policies that offered unisex pricing. Single women won’t be the only ones affected by the change; a married woman who doesn’t apply with her husband—say, because the husband is too ill to pass medical underwriting—will also be charged more.
The increases are substantial: Premium rates for a woman buying an individual policy with 3% annual compound inflation growth are now 42% to 63% higher than a comparable policy for a male, according to an analysis of Genworth and John Hancock policies done in May by the American Association for Long-Term Care Insurance. The average annual premiums for a 55-year-old female for a policy worth $164,000 over 3 years, including a 3% compound inflation growth option, are now $2,700 per year, versus $1,850 for a man the same age, according to the association. While consumers in recent years have faced premium hikes in many long-term care insurance policies, buyers of these new policies will likely see more price stability, experts say, as the industry has largely corrected for the miscalculations behind the increases.