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A Self Defense Policy For Women


BusinessWeek Investor: Hers

A Self-Defense Policy for Women

Long-term care insurance isn't cheap, but the coverage guards against a huge financial burden

Mara Jones, director of residential and treatment services at Carolina Children's Home in Columbia, S.C., considers herself lucky. Her 77-year-old father, Charles Horton, took out long-term care insurance six months before he suffered several strokes in 1996. The insurance pays for the nine hours of care he receives daily in their home--assistance Jones doesn't have to provide. "My father took out the policy because he didn't want to be a burden to his children," says Jones. "I would have had to quit my job to care for him." She and her husband say they're now considering a similar policy for themselves.

The decision to buy long-term care insurance for your parents or yourself is a complicated one involving everything from family assets to your ability to care for your mom, dad, or an infirm spouse. But the issue has special meaning for women. Females tend to shoulder the burden of providing care for an aging relative and are also the most likely to require help in their old age. Since more women than men quit their jobs to be caregivers, this "may be the greatest threat to a woman's financial independence," says Phyllis Shelton, president of LTC Consultants, a Nashville firm that trains agents who sell long-term care insurance, and author of Long-Term Care Planning Guide (Shelton Marketing Services, $19.95).

Women benefit a second way through long-term care insurance. "More women end up needing long-term care" because they live longer than men, says Robert Pearson, CEO of CareQuest, a Madison (Wis.) consulting firm specializing in long-term care planning. Indeed, 75% of all nursing-home residents are women, as are 67% of current home health-care agency patients.`INDEPENDENCE.' Long-tein your 40s, to $3,000 for those in their 70s. Policies make special sense for middle- to upper-middle-income people who can handle the premiums but couldn't easily afford the care (BW--July 7, 1999).

Be sure to talk with an independent insurance agent about your options. Although you should review offerings from several insurers, be wary of bargain-basement policies--they're a virtual guarantee of future rate hikes. Make sure you purchase an inflation rider. And select a company with at least $2 billio, run by the states, is available only after an individual has depleted most of her assets. But Medicaid only pays for a nursing home, not home health care or assisted living. "People buy this product for freedom of choice and independence," says Kathleen Ligare, senior vice-president of GE Financial Assurance's long-term care division.

Long-term care coverage isn't cheap. Depending on your age, the features you select, and the cost of care in your region, annual premiums may run from $500, if you're in your 40s, to $3,000 for those in their 70s. Policies make special sense for middle- to upper-middle-income people who can handle the premiums but couldn't easily afford the care (BW--July 7, 1999).

Be sure to talk with an independent insurance agent about your options. Although you should review offerings from several insurers, be wary of bargain-basement policies--they're a virtual guarantee of future rate hikes. Make sure you purchase an inflation rider. And select a company with at least $2 billion in assets and high scores from an insurance rating firm (at least an A- from A.M. Best). After all, you'll need your insurer to be around for many years.For more on long-term care insurance, or to join a discussion in our forum, see hers.online at www.businessweek.com/investor/Questions? Comments? E-mail hers@businessweek.com or fax (212) 512-2538By Toddi GutnerReturn to top

TABLE

Why Long-Term Care Insurance Matters for Women

THEIR CAREERS SUFFER...

-- 66% of informal caregivers are women.

-- 12% of women have to leave their jobs after becoming a caregiver.

-- By 2005, one out of three workers will be caring for an aging parent....AND THEY'LL LIKELY NEED CARE

-- Women live six years longer, on average, than men. So they may not be able to count on their husbands to provide care.

-- A 65-year-old woman has a 52% chance of eventually needing

nursing-home care, vs. 36% for a 65-year-old man.

-- 75% of nursing-home residents and 67% of the elderly receiving home health care are women.

DATA: LONG-TERM CARE PLANNING GUIDE, JOHN HANCOCK FINANCIAL, NATIONAL COUNCIL ON AGINGReturn to top


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