Long-term care insurance to see major shift in policy pricing
The long-term care insurance industry is making moves to break away from its traditional unisex focus to adopt a more gender-based pricing structure. Several long-term care insurance companies have begun focusing on health care information that separates women from men and these companies believe that the time is right to address the issues that these two parties represent by restructuring fees and altering the prices associated with certain policies. Genworth is one such company.
Genworth to embrace gender-specific pricing
Genworth has announced that it will be adopting gender-specific pricing in the second quarter of this year. The company is among the first in the long-term care insurance sector to adopt this methodology, but it will not likely be the last, as others in this industry have also begun considering making the shift. This may be good news for consumers in the short term, as people still have some time to purchase long-term care insurance policies before more companies adopt gender-specific pricing.
New pricing structure may raise rates by 40%
By switching to gender-specific pricing, Genworth expects to better manage the various medical issues that are exclusive to women and men. These issues have long made it difficult for insurers to price coverage in an adequate manner due to their unisex approach. Critics of the shift argue that it could raise rates for this insurance coverage by as much as 40%, with women likely to see the most significant rate hikes.
Use of gender information continues to be a touchy subject
Using gender information to price policies has been a very controversial issue throughout the overarching insurance industry. In many states in the U.S., using such information to price health insurance coverage is banned. Long-term care insurance is, however, another matter, as it does not solely account for medical care but also for the costs associated with assisted living and other such services. Genworth, as well as other insurers adopting gender-specific pricing, is likely to face significant criticism for its move, but has no plans to alter its approach to the issue in the foreseeable future.