With 10,000 Americans turning 65 each day, long-term care planning is an issue for all Baby Boomers.1 However, it’s an issue of urgent importance for women.
Women in particular need to plan ahead for long-term care in retirement because they face extra challenges when it comes to living comfortably and receiving the care they need.
Why is this the case? Here are four reasons why long-term care is an urgent issue for women:
- WOMEN LIVE LONGER
According to the latest Centers for Disease Control figures, the average American man will live to age 76, while the average woman in America will live to age 81.2 This means women are more likely to need long-term care and incur more long-term care expenses than men. In fact, more than 70% of nursing home residents are women.3 And with a private room in a nursing home costing $100,380 a year,4 these extra years of needing long-term care can significantly impact women’s finances.
- WOMEN LIVE WITH HIGHER RATES OF DISABILITY AND CHRONIC HEALTH PROBLEMS
With older age comes higher risk of disability and chronic health problems for women. Women spend twice as much time in a disabled state than men at the end of their lives.5 The average woman who lives past age 65 will spend 2.8 years in a disabled state, or 3.0 years if they live past 80.5
- WOMEN ARE MORE LIKELY TO AGE ALONE
Whether it’s due to widowhood, divorce or other reasons, women are more likely than men to live alone in their older age.3 Married women are often caregivers for their husbands, but unfortunately, many women are widowed by the time they fall disabled or ill. This means there’s no one there to provide them with long-term care when they need it, leading them to need professional caregiving services.
- WOMEN TEND TO HAVE A SIGNIFICANTLY DIFFERENT FINANCIAL SITUATION THAN MEN
There are a number of factors that cause many women to be at a financial disadvantage in retirement compared to men. Many women work fewer years than men due to time off for child rearing or caregiving. Women are also more likely than men to work part-time, which means they don’t qualify to have a retirement plan. On top of that, women earn less than men, only earning 81% of what men earn.5 All of these factors add up to a lower lifetime savings for women than men, which means less resources to help cover the significant costs of long-term care.
How can women prepare for long-term care in retirement?
Long-term care is a significant expense for women to plan for. Consider these monthly costs of care:4
- Home health aide: $4,195
- Adult day health care: $1,560
- Assisted living facility: $4,000
- Private room in a nursing home: $8,365
Although many people assume Medicare will cover long-term care expenses, it often doesn’t. And paying out of pocket often requires significant savings, which isn’t an option for many women. That’s why a growing number of retired women are turning to long-term care insurance to help protect their futures.
Long-term care insurance for women
A long-term care insurance policy is designed to help you pay for the long-term care services you need. Long-term care insurance policies typically reimburse policyholders a monetary daily amount (up to a pre-selected limit) for assisted care services such as eating, bathing or dressing. You can usually select a range of care options and benefits that allow you to get the services you need, where you need them.
Here are some typical benefits of a long-term care insurance policy:
- Offers independence and financial security
- Offers flexibility in making choices and the option to live at home
- Provides coverage for unexpected health expenses
- Provides coverage that travels with you
How much does long-term care insurance cost?
Long-term care insurance premium amounts are determined by your length of coverage, your age/gender, your current health, the elimination period (the amount of time before your policy begins to pay benefits) and the maximum dollar amount you can be reimbursed for covered expenses.
Qualifying for coverage can become more difficult as you age, so the best time to apply is while you’re still in good health.
Are you eligible for long-term care insurance?
The first step in purchasing long-term care insurance is meeting with an experienced licensed insurance agent/producer to determine which plan is right or you. Most individual long-term care insurance policies require medical underwriting and may require a medical exam. Insurance underwriters will review your medical history to determine if your application is acceptable and to identify your risk classification.
We’re here to help!
Here at Bankers life, women account for 40% of our insurance agents. We are especially equipped to meet the unique challenges women face as they near and enter retirement. If you’re interested in learning more about long-term care insurance, click here. If you want to read more about long-term care insurance, click here.
Nothing in this post is intended to be a solicitation of insurance in any jurisdiction. Its purpose is the promotion of interest in Bankers Life and insurance in general. Any inquiries regarding the possible purchase of an insurance policy will be directed to a licensed insurance agent, in which event an insurance agent may contact you.
1Bankers Life Center for a Secure Retirement, Retirement Care Realities for Middle-Income Boomers, 2019, p. 3. 2Time, Why Do Women Live Longer Than Men?, https://time.com/5538099/why-do-women-live-longer-than-men/#targetText=The%20numbers%20don’t%20lie,tend%20to%20be%20healthy%20ones., January 2019. 3American Association for Long-term Care Insurance, Long-Term Care – Important Information for Women, http://www.aaltci.org/long-term-care-insurance/learning-center/for-women.php, accessed 2019. 4Genworth, Cost of Care Survey 2018, https://www.genworth.com/aging-and-you/finances/ cost-of-care.html, 2019. 5CNBC, This chart shows how much more money men earn than women in the U.S., https://www.cnbc.com/2019/07/29/how-much-more-money-men-earn-than-women-in-the-us.html, July 2019.