Arthur Rudnick
Guru
- 1,652
Bye Bye Female Discount
Hello SALES!
You may be aware of the fact that, until now, long term care insurers have used 'unisex' pricing. As a result, a female applicant would pay the same as a male applicant -- despite the following facts (from the 2012 LTCi Sourcebook):
1. women make up 65% of new claims.
2. women receive two thirds of all LTCi benefit dollars.
This is the equivalent of a driver with three car accidents over the past two years paying the same for car insurance as someone with no accidents or traffic tickets on their driving record.
Well, all this is now changing. Long-term care insurance is evolving and changing. As part of that change, the nation's leading insurers are (or have already) filed new products that will offer 'sex-distinct' rates. Women can expect to pay from 20% to 40% more than men for long-term care insurance.
This provides an opportunity to reach out to prospects -- especially those who postponed making a decision.
Will all insurers follow suit? I believe they will over time (though they may initially say otherwise).
Two reasons: Anti-selection risk. Insurers offering single women LTCi at the same price as single men will be offering 'under-priced' coverage ... a practice that has come back to haunt some insurers. For those writing few policies, there is a lower risk - but for the major insurers, the more under priced policies they sell to women ... the greater the financial risk they will ultimately face. I predict all will be watching to measure acceptance. Ultimately, they will follow suit.
Hello SALES!
You may be aware of the fact that, until now, long term care insurers have used 'unisex' pricing. As a result, a female applicant would pay the same as a male applicant -- despite the following facts (from the 2012 LTCi Sourcebook):
1. women make up 65% of new claims.
2. women receive two thirds of all LTCi benefit dollars.
This is the equivalent of a driver with three car accidents over the past two years paying the same for car insurance as someone with no accidents or traffic tickets on their driving record.
Well, all this is now changing. Long-term care insurance is evolving and changing. As part of that change, the nation's leading insurers are (or have already) filed new products that will offer 'sex-distinct' rates. Women can expect to pay from 20% to 40% more than men for long-term care insurance.
This provides an opportunity to reach out to prospects -- especially those who postponed making a decision.
Will all insurers follow suit? I believe they will over time (though they may initially say otherwise).
Two reasons: Anti-selection risk. Insurers offering single women LTCi at the same price as single men will be offering 'under-priced' coverage ... a practice that has come back to haunt some insurers. For those writing few policies, there is a lower risk - but for the major insurers, the more under priced policies they sell to women ... the greater the financial risk they will ultimately face. I predict all will be watching to measure acceptance. Ultimately, they will follow suit.
