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New research on the cost of long-term care insurance shows the importance of shopping around for the best price.

While costs for the best-selling long-term care insurance policies are going up, the gap is widening between the lowest and highest prices for the same coverage, according to an analysis by the American Association for Long Term Care Insurance.

Long-term care insurance pricesThe association’s 2015 “Long Term Care Insurance Price Index” found that the overall cost for new coverage rose 8.6 percent compared to a year ago:

  • A healthy 55-year-old man will pay an average of $1,060 per year for $164,000 of potential benefits, compared to $925 in 2014.
  • A healthy 55-year-old single woman will pay an average of $1,390 a year for a potential $164,000 in benefits, up from $1,225 last year.
  • A married couple, both age 60, would pay a combined average of $2,170 a year for a total of $328,000 of coverage. Last year they would have paid an average of $1,980 for the same benefits. By adding a feature to protect against inflation, the couple would pay another $1,760 for protection, which would build the benefit pool to a combined $730,000 at age 85, according to the association.

Single women pay more for coverage because they tend to live longer than men and need care longer — an average of 3.7 years compared to an average 2.2 years for men, according to the National Clearinghouse for Long Term Care Information. About 70 percent of today’s 65-year-olds will need long-term care at some point in their lives.

Health insurance, including Medicare, generally does not cover long-term care, which pays for assistance with daily activities, such as eating, bathing and transferring in and out of a chair or bed. Long-term care insurance can cover care that’s provided at home or at assisted living, nursing home or adult day care facilities.

The big long-term care insurance price gap

The association’s price index is based on a review of top-selling policies by leading long-term care insurance companies. Prices for comparable coverage vary more widely this year than last year.

“In some situations the difference between the lowest-cost policy and the highest cost was 34 percent, but it could be as much as 119 percent,” association director Jesse Slome said in a statement. “Our average 55-year-old woman could pay as little as $890 a year or as much as $1,829 based on which insurer she buys from.”

Long-term care insurance rates are going up because of higher claim costs and continued low interest rates, which limit insurers’ earnings on investments, an important source of revenue for insurance companies.

Despite the odds of needing long-term care, most consumers aren’t talking about it with their families, and women lag behind men in financially planning for long-term care. A recent survey by Northwestern Mutual found that fewer than two in five consumers understand their family members’ wishes regarding future care. And a troubling number have yet to financially plan for their own needs. Only 23 percent of women and 35 percent of men say they have addressed long-term care in their retirement plans. Slightly more say they are saving for future long-term care needs — 39 percent of men versus 31 percent of women.