LTC premium changes depend on gender, marital status, insurer

A recent survey shows that many baby boomers are not saving enough money to pay for their potential long-term care needs, but those purchasing insurance to cover the costs are facing varying changes to their premiums depending on their gender and marital status, according to the American Association for Long-Term Care Insurance (AALTCI).

LTC insurance costs have risen slightly for couples, increased more significantly for single women and decreased for men, according to the 2014 National Long Term Care Insurance Price Index, an annual comparison of costs for 55-, 60- and 65-year-olds compiled by the AALTCI.

"Last year, leading insurers began charging women higher premiums," says Jesse Slome, director of the national trade group. Women accounted for two-thirds of the $6.6 billion in LTC insurance claim benefits paid out, she noted.

A 55-year-old single woman pays an average of $1,225 per year for the same level of benefits ($164,000) available to a single man for $925, according to AALTCI. The typical single woman will pay an average of 12 percent more than in 2013. That 55-year-old single male will pay $1,765 for coverage that increases the benefit pool to $365,000 at age 85, a 14.5 percent decline from last year's average.

The AALTCI study also shows a significant spread between rates charges by insurers. "One insurer will literally charge more than double for virtually the same level of benefits," Slome says. The report notes differences ranging from 31 percent to as much as 114 percent. "No one insurance company is always the least nor always the most expensive," he adds.

Tell families seeking your advice to do their research. The AALTCI recommends a  'Good, Better, Best' approach to LTC  planning for those in their 50s and 60s, Slome says. " ‘Good’ coverage provides $164,000 of available benefits for each spouse. ‘Better’ coverage includes an option to add future coverage. The ‘Best’ option, also the most costly, includes an automatic inflation growth feature," he adds. Needs will vary based on an individual’s situation.

Today, $3,840 is the average annual cost for 'Best' coverage for a 60-year-old couple each purchasing $164,000 of immediate coverage that grows to a combined benefit pool of $730,000 ($365,000 each) at age 85, according to the AALTCI. The amount represents a three percent increase from the 2012 average of $3,725 and is 4.8 percent higher than 2012 ($3,663), Slome says.

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