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Gender based LTC insurance pricing - how is it impacting LTC planning?

Posted by Tom Riekse Jr | Sep 25, 2014 3:47:00 PM


It's now been a couple of years since LTC carriers have introduced sex-distinct rates in LTC Insurance. What's been the impact?

First a reminder of why gender based pricing was introduced. According to Genworth 2013 claim information, about 66% of claims are filed by females. Another way of looking at it was that in 2011, according to the AALTCI, only 1/3 of the $6.6 billion in claims was paid out to men. These claims trends have been evident for many years, and as carrier received more and more single female business they became justifiable concerned.

The answer was gender specific rates. Just as life insurance uses gender for pricing since men don't live as long (thus have higher premiums), carrier actuaries priced woman applicants for LTC insurance higher, while lowering rates from men.

Of course, once one carrier started the trend others had to follow lest they attract a heavy proportion of single female business. The impact - fewer single female applications and more couples applications. On the other hand, the reduction in premium for single men has probably not attracted new business because they have always been a small percentage of LTC purchasers.

Now, most of the major carriers offer sex distinct pricing with one notable exception - employer based programs.

Employer programs are subject to Title VII of the Civil Rights Act, which bans discrimination by sex for employer benefit programs. Because of this LTC premiums for men and woman employees are the same. For single females considering LTC Insurance, they may want to check if their employer offers a program first.


Written by Tom Riekse Jr

Tom Riekse, Jr., ChFC, CLU, CEBS is the Managing Director of LTCI Partners. He has been working in the long-term care insurance business since 1991 with an emphasis on communicating the value of LTC planning to advisors, employers and consumers. He has primary responsibility for all marketing and technology initiatives at LTCI Partners, and has worked closely with carriers and vendors to make LTC Insurance easier to sell and enroll. Tom received his undergraduate degree in from Hope College, Holland Michigan. He subsequently achieved his MBA at the University of Illinois at Chicago, with a concentration in finance and marketing. He holds the Certified Employee Benefit Specialist designation from the International Foundation of Employee Benefit Plans and the Wharton School and his Chartered Financial Consultant from the American College.

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