|By Bill Toland, Pittsburgh Post-Gazette|
|McClatchy-Tribune Information Services|
The change is one of several policy and pricing revisions in store for buyers of long-term care insurance, which provides a payout in the event that the policyholder needs to be cared for in a nursing or assisted-living facility. Some carriers are seeking dramatic premium increases and axing spousal discounts and lifetime benefits; others are coming out with new hybrid products; and still others are getting out of the product line altogether, citing its unprofitability and unpredictability.
One of the biggest changes is
The result is that women could be charged 40 percent more than men for a newly written policy.
"If you walk down the hall of an assisted living home, it's mostly ladies," said
In so doing, long-term care insurance is following in the footsteps of auto insurers -- which set rates based on age and driving record -- and health insurers -- which sometimes set rates based on health, age and gender.
"Other companies are taking a look" at
In the short term, she said
And on Friday, two more LTC premium increase requests were announced by the state
The premium increases have been so dramatic, experts say, because long-term care insurance was, in retrospect, underpriced, particularly for policies that were sold more than a decade ago.
Even as the pricing comes into what insurers consider better alignment, low interest rates over the last four years have been hurting the industry, which takes the premium money, invests it and uses the return to pay benefits down the road. Low interest rates means lower returns on investments and less money to pay beneficiaries.
"All of the carriers have been challenged by the record-low interest rates," said