What exactly is Long Term Care Insurance? And why is it so important? According to a 2020 survey by the American Association for Long-term Care Insurance, the following are the top motivators that prompted current long-term care insurance policyholders to purchase their policies:

52.1% – planning for retirement

34.7% – protecting their assets

23.6% – influenced by an experience with a loved one who needed LTC

8.1% – security or peace of mind knowing future needs would be met

It’s an increasingly important consideration for an aging population that is living longer than ever. The U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point- and that care doesn’t come cheap: Long-term care costs range from $19,500 per year for adult day care to $102,200 per year for a private room in a nursing home in the US.

Why is long-term care a woman’s issue?

Two words: longevity and caregiving. Women live longer than men and have higher rates of disability and chronic health problems, thus are far more likely to need long-term care. A CIA study from 2015 reported that women in the US have a life expectancy of 82 and men 77. According to Time Magazine, Gertrude Weaver from Arkansas just celebrated her 116th birthday on July 4th as the oldest living American!  Living a long life has its advantages; but often times as we age, unfortunately, our health and mobility aren’t able to keep up.

There are a variety of key factors at hand when evaluating the cost and importance of LTC for women. In addition to a tendency to live longer, women are also the caregivers, so when their husbands need long-term care, wives are there. Thus unfortunately, because many women are widowed, there is no one there to provide care for them. The following statistics address some other key factors:

  • Women are more likely to file LTC claims than men (roughly 67% of all claims are currently for women[1])
  • Women comprise about 70% of nursing home residents, and 75% of those in assisted living facilities[2])
  • Women are more likely to live alone and not have a family member to serve as a caregiver.  In fact, about 80% of women die single or widowed, while about 80% of men die married.

Given this situation, insurers set their premiums accordingly, resulting in a 30-50% increase in price for single women than for single men.[3] The American Association for Long Term Care estimated that the annual premium for a single male in 2020 was $1,700, while being $2,675 for a single female.[4] While this may be shocking, it’s important to note that these are only averages based on a pool of data gathered from leading insurance carriers. The costs of long-term care insurance can vary widely, depending on several key factors:

  • Health: Some medical conditions like muscular dystrophy, cystic fibrosis and dementia can disqualify one from being able to purchase a policy because insurers could likely lose money on them. Generally, the healthier you are, the less likely you’ll be to need to file a claim – and so the lower your premium.
  • Age: In general, you’ll pay more in long-term care insurance if you take out a policy when you’re older, since you’re probably less healthy and you’re closer to needing the assistance the policy covers. This is why the AALTCI and other professionals recommend that individuals begin shopping for long-term care insurance between the ages of 52 of 64.
  • Marital status: When combined, premiums tend to be lower for married couples than they would be for individuals paying for a personal policy.
  • Carrier policies: Each insurance carrier sets its own rates and underwriting standards. In fact, cost for a particular service can vary widely from one company to another, so it’s valuable to gather quotes from various carriers. You might also be wise to consider working with an experienced long-term care insurance agent and / or a wealth management professional who can gather these for you and help you understand the differences.

With so much to consider, what’s a woman to do? Start here:

First: Start looking into long term insurance earlier than you think.  The younger you are when you buy LTCI, the less expensive it is.

Two: Work with a specialist that can help determine your best option because like we mentioned earlier, the cost for the same benefits can vary significantly from one carrier versus another. There are also discounts to consider such as those for association memberships or owning different policies from the same carrier.  Since this coverage will be with you for a long time, little savings can add up.

Three: If you are married or in a partnership, consider applying together; you will qualify for lower premiums than had you applied separately, you can pool your benefits and use them in any combination you need, and you’ll have peace of mind heading into that later phase of your lives together.

Four: If you’re a woman living alone (which means you are single, divorced, separated or widowed) it’s especially important that you consider getting some long-term care insurance. Women are smart, serious and strong, and it’s never been more important to channel that power into action by taking control to protect your financial future. And if you’re a woman married to a husband who’s “never going to need this,” let a long-term care insurance professional show you how a shared care plan can cover you … and if he’s wrong (we know that never happens) allow him to tap into your protection. You’ll both be glad you took action.

IMPORTANT DISCLOSURES: This material contains only general descriptions and is not a solicitation to sell any insurance product or security, not is it intended as any financial or tax advice. For information abut specific insurance needs or situations, contact your insurance agent. In addition, state insurance laws and insurance underwriting rules may affect available coverage and its costs. Guarantees are based on the claims paying ability of the issuing company. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through InVestra Financial Services, a registered investment advisor and separate entity from LPL Financial. LPL Financial and InVestra Financial Services do not offer tax or legal services.

[1] https://www.aaltci.org/news/long-term-care-insurance-news/majority-of-long-term-care-insurance-claims-made-by-women

[2] https://www.healthinaging.org/age-friendly-healthcare-you/care-settings/nursing-homes

[3] https://www.kiplinger.com/article/retirement/t036-c000-s004-long-term-care-coverage-costlier-for-women.html

[4] https://smartasset.com/insurance/how-much-does-long-term-care-insurance-cost