Long-term care insurance can be nearly triple for a woman as oppose to a man. Why do women pay more for long-term care insurance? The reasons for the cost differential between men and women underscores just how important it is for women to have the coverage.
According to the U.S. Department of Health and Human Services, the total long-term care expenses average over $91,000 for men and double that for women. That is partly because women live longer than men. Women also have a higher rate of chronic illnesses, like depression that can necessitate care over an extended period. Also, almost two-thirds of Americans with Alzheimer’s disease are women.
This is why women spend so much more money on long-term care insurance than men. Here are 7 Tips for Women to consider when shopping for long-term care coverage at a price point that works.
- Talk to an adviser about options. Discussing your financial goals and concerns about the future and the cost/benefits associated with the various options will enable an adviser to solidify an appropriate plan of action. Seeking the advice of objective advisers who do not sell insurance ensures the discussion and resulting decisions remain objective. If insurance is the answer, team up with a qualified long-term care specialist.
- Reduce the risk of premium hikes. Purchasing a larger daily benefit with a lower Cost of Living Adjustment option can mitigate the risk for future increases.
- Couples can consider shared-care policies. This option lets a married couple share and potentially reduce, the gender differential on coverage available to men and women.
- Plan for the needs of single women. Married people often delay filing long-term care insurance claims because the healthy spouse often performs the easy tasks. However, single women must rely on caregivers in the absence of a healthy spouse. At the same time, single women may be able to accept a greater level of co-insurance since there is no spouse to care for.
- Open a Health Savings Account (HSA). Tax-exempt HSA dollars can be used to pay long-term care premiums, subject to deduction limits. You must be covered by a qualified “high-deductible” health insurance policy to open an HSA.
- Choose a hybrid long-term care insurance policy. Hybrid plans include life insurance and ensure that a premium will never increase and there is cash value in these universal policies. They pay the family in either life insurance proceeds or long-term care benefits.
However, there are some trade-offs. Hybrid policies often require substantially more premium in the early years and inflation protection is very expensive. - Plan Early! Insurers are becoming more conservative, which means there’s been an increase in rates and a decrease of applicants due to their medical histories. The sooner you plan, the more options you are likely to have in the future.