“Whatever happened to those Long-Term Care Insurance plans employers were offering years ago? If I recall, they not only offered me Long-Term Care Insurance, but I could also offer it to my wife and my parents.”

This was a question a practice owner asked me when she was inquiring about setting up a group Long-Term Care Insurance plan for her employees. The plans the doctor was referring to are the Guaranteed Issue (GI) or Guaranteed Standard Issue (GSI) insurance plans that doctors were offered for Long-Term Care (LTC) and Disability Income insurance (DI).

What happened was that more women were entering fields previously dominated by men. Years ago, we used to see gender-neutral individual and group LTC plans. The group plans were guaranteed issue in that anyone could sign up regardless of their health. This worked out great for the insurance companies because most of the group plans were marketed to large entities where most of the employees and upper management were men. As more and more women entered the workforce and as the claims were being processed, the companies realized that offering gender-neutral rates and guaranteed issue group plans was costing them too much. Women live longer and have a higher cost of claims, so overall, Long-Term Care is more expensive for them. Realizing that offering these group plans was no longer sustainable, many of them dropped out of that business and the rest went to gender-specific rates. Now we are at a point where group plans are not available for companies who have a workforce where more than 50% are women. The plans are also not available if too many of the employees make less than $40K per year.

This is an unfortunate situation because, on average, women do earn less and live longer. Now if they want to protect their retirement savings, they will be paying more to get LTC coverage by applying for a personal policy. That is if they can get approved. GSI Group plans are sometimes the only way women and those having pre-existing health conditions can get coverage at all. On the other hand, group plans are not always the best for men because they might be able to get an individual plan outside of their group plan that is less expensive and offers a better benefit. That adds to the problem as most group plans have a participation requirement. If they do not have enough employees sign up, they will either pull the offer or offer another option that is just like buying an individual policy, where age, gender, and health determine the cost of coverage. That means the women and men who are not healthy enough to qualify for the lesser expensive individual plans are depending on others to help them pull together a big enough group to meet the participation limits.

Long-Term Care is not the only insurance that is dealing with the cost of covering females. Long Term Disability also offers group plans that are guaranteed issue or guaranteed standard issue (GSI). Those too are becoming few and far between in some industries. In fact, back in 2016, I was working with a dean at a local veterinary school. We were trying to secure a group plan for those doctors who were just finishing up their veterinary school studies. I called around to a couple of carriers and they said they were willing to offer the graduating class a plan. That was until they asked me to send the school’s enrollment numbers. When the dean and I pulled together the numbers to send them, he remarked how things had changed since he was in school. Back then, most of the students were male. Now those numbers are reversed, and he says he expects it will be up to 80% women in no time. Plus, he also said they are also seeing more students enroll who are non-binary and gender nonconforming.

The insurance carriers seem to share his expectation because when they saw the increasing numbers of non-male students, they said that they could not offer a GSI plan. The best one insurance company would offer was a discount. The policy they offered was not gender-neutral and the students would have to go through underwriting. They also required a participation minimum to receive the discount. The school decided not to go with the plan.

What options do women have if they want to get LTC coverage, especially if they are young or work in a state that is considering a program like the WA State Long-Term Care Trust Plan? They can look at an individual LTC policy, a hybrid LTC policy, or a Life Insurance Policy or Annuity with an LTC rider. In fact, the cost of Life Insurance is less expensive for females than it is for males so a Life Insurance policy with an LTC rider can be a better route for securing a good amount of Long-Term Care at a reasonable cost. Plus, if they do not use the policy for LTC, they will use it for the death benefit or cash value. In short, unlike some of the group plans where the LTC plan is “use it or lose it,” they will get a policy that they will use no matter what.

For disability insurance, if they are offered a GSI plan, they can compare it to adding a personal plan and choose the one that works best for them now and later when they are established in their career. If they get a GSI, then reviewing it on a regular is recommended. That is because the benefits of the GSI plan might not have future purchase options or inflation protection. If the policy no longer works, they can fix it, replace it, or supplement it with another policy to fill in the gaps.

That brings me to the next part about group versus individual plans. As I mentioned, GSI plans usually require a minimum participation number. And some of them also set it up so that the employer deducts the cost of the insurance directly from their paycheck. Even though these policies are owned by the employee, some will not take them with them when they leave the employer who offered the plan. Others think that they do not need the policy if they change fields. Many times, these employees think the employer is responsible for the policy and do not know they can take the policy with them and even have their own advisor service the policy.

Part of having a good plan in place is also having an advisor that they can call to service the policy and make sure their information is up to date and correct so that if they should need to go on claim, the policy will do what it is meant to do. In fact, it is wise to have a regular review of all policies and accounts. It is also helpful to work with an advisor who is an expert in working with someone like them and is proactive about contacting them if there is a change, update, or new law that affects them. That is even when they purchase insurance through their employer. They, or rather their spouse, partner, or family will need to know who to call submit a claim.

Let’s face it, chances are if they go on claim, they will not be the one calling the insurance company. The last thing that they need is to have the person who is trying help them jump through hoops to file a claim. If a wife calls about a husband and they both have the same last name, it usually works out okay. But, when the last names are not the same or when both spouses are of the same gender, the process is not as easy as it should be. Having a trusted advisor going to bat for them is always helpful because the advisor can shortcut the whole process and get things rolling for the claim. The advisor is the one who gets to explain why they have different last names or deal with that awkward silence on the line when they question when a woman calls to initiate a claim for her wife.

I have been on these calls several times and when the client says they have their advisor on the line, the given response is, “What is his name.” That same thing happens when women call about their female spouse and the person on the other end of the line says, “What is his name.” It might not seem like a big deal, but when you are dealing with the complexities and emotions behind a claim, these comments erode the trust that their spouse is going to get the help they need.

In summary, one word of advice I would give young professional women. Let’s plan for a future where more women continue to enter fields previously dominated by men. Let’s expect to see benefits change. Gender-neutral policies are pretty much gone for Long Term Care and Disability Insurance and GI and GSI being will soon be replaced by simplified underwriting. That means that young, healthy people will have an easy application process and the rest hopefully are working with advisors who can help them navigate through these changes and get the protection they need now and in the future.