Women Living Alone Don't Know This Vital Fact

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This is a provocative headline designed to draw the attention of women who are single, women who are divorced or widowed and even for women who are presently married because chances are, at some point in the future, you will be living alone.

The topic is long term care insurance and there is a single, incredibly important fact and tip, that no one ever shares with women living alone.  I won't even make you read the full article to get to it.  The fact is that women receive most of the long-term care today and get two-thirds of all long-term care insurance benefits.  Here comes the tip: currently, long term care insurance rates are the same for men as for women.  But I don't believe it will stay that way forever and that results in an important savings opportunity.  Keep reading.

Long term care planning is especially important for women because women are often impacted as providers of care for another family member and, ultimately, women have a higher likelihood of needing what we refer to as long term care.  We'll look at insurance as part of that plan in a moment.

The greater need to plan for the greater risk of needing care is primarily the result of the fact that women live longer than men, about five years longer.  According to the Woman's Guide To Long-Term Care Insurance which I authored for the American Association for Long-Term Care Insurance, here are the relevant facts. 

  • Women are far more likely (than men) to reach age 85
  • Women age 75+ are far less likely to be married (38%) than men (74%)
  • Women over age 65 are twice as likely to be living alone
  • Women over 65 include 980,000 nursing home residents versus 337,000 men
  • Women are far more likely to suffer from Alzheimer's Disease

Women who are married have spouses to turn to when care is needed.  Often they have adult children and extended families.  No one likes to turn spouses, loved ones or family members into unpaid caregivers but it happens every single day.  The government estimates nearly 40 million provide free care to an elderly family member.

Women living alone don't have the built-in network.  And a need for long term care is not like a flu where you'll be back on your feet in a few days.  You can be incapacitated for weeks, for months, for years.

WOMEN BENEFIT THE MOST FROM LONG-TERM CARE INSURANCE

Each year the Association studies the long term care insurance industry market.  Last year insurers paid some $6.6 billion in claims (benefits) to over 200,000 individuals.  And 65 percent of all new claims started (opened) in 2011 were for women, about half of those started as claimants who received care in their own home.

As an aside, the largest claim still being paid is covering care for a women who has been receiving care for almost 15 years.  Over $1.7 million in benefits have been paid.   The nation's two largest insurers Genworth Financial (NYSE: GNW) and John Hancock owned by Manulife Financial (NYSE: MFC) each have over a million policyholders and have paid billions of dollars in claims.

So, women have the greater need for long term care.  And, they get the greater benefit from owning long term care insurance.  It would be reasonable to assume that women pay more for equal insurance coverage.  After all, bad drivers pay more than good drivers. 

But that is currently not the case.  Insurers use 'unisex' rates and as a result a single woman currently pay the same as a single man; all other things being equal.  This is a situation that will likely not last forever as leading insurers who are committed to the marketplace develop newer products for today's economic realities.  Those who lock in coverage before a change will not lose the savings benefit should insurers abandon the unisex approach to pricing.

It's my opinion that both men and women -- especially those over the age of 50 -- need to have a plan for living a long life, into your 80s, 90s or beyond.  The decision to include some long term care insurance is, in my opinion, an even smarter move for women -- especially women living alone today (as well as those who worry they may be at some time in the future).

Finally, there are about a dozen leading insurance companies today who offer this coverage.  Some of the publicly held companies include Transamerica owned by Aegon (NYSE: AEG) and there are also linked-benefit policies offering life insurance with LTC benefits from companies like Lincoln Financial Group, owned by Lincoln National Corp (NYSE: LNC). The costs and policy provisions can vary significantly and for that reason we advise you to work with a knowledgeable long term care insurance specialist who is 'appointed' to sell multiple insurance policies.

A FINAL TIP FOR WOMEN BUSINESS OWNERS

Long term care insurance tax deductions are for business owners and with more women heading their own company or being self-employed, the tax advantages are just one more reason to look into this coverage sooner rather than later.

 


JesseSlome has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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