Spring is in the air, so that means the Federal Government is offering long term care insurance to Federal Employees. Open enrollment is available April-June. More than any other issue, our clients shopping for long term care insurance wish to know whether group long term care insurance is a good deal or not. The Federal Employees long term care insurance plan is the largest group offering in the country.
First, let’s discuss how group long term care insurance plans are beneficial. If an employee can obtain long term care insurance with no medical underwriting and said employee has significant pre-existing health conditions and is otherwise uninsurable for long term care insurance, the group plan may be a good deal.
First off, I will say this. LTC Partner has reviewed group long term care insurance offered to employees of many of the largest companies and organizations in the United States. IBM, AT&T, Lockheed Martin, Delta Airlines, Kimberly Clark, and many others. In every review, the group long term care policy offers less benefits and costs more premium than an individual long term care insurance policy.
Why is this? Well, group long term care insurance usually has a period of open enrollment where everyone who applies is accepted. Thus, the long term care insurance company has to account for the fact that within the group are uninsurable individuals that are a likely future claim. How does the long term care insurance company manage this risk? Simple. By increasing the premiums and diluting the benefits across the board. You, the healthy employee are paying the bill for your fellow unhealthy co-worker.
Typically, group long term care insurance plans fail in three areas: home care, exclusions & discounts.
1. Home Care benefits are almost always reduced. Most group plans only reimburse employees at a 50% or 60% level for home care. Individual policies pay 100%.
2. Many group plans have exclusions for claims arising from mental and nervous disorders. Individual policies do not have this exclusion.
3. Group plans do not offer discounts for being married or in good health. Individual plans offer these discounts that can save a consumer 25% to 50%.
When is a group long term care plan a good deal?
One narrow unique situation.
If an employee can obtain long term care insurance with no medical underwriting and said employee has significant pre-existing health conditions and is otherwise uninsurable for long term care insurance, the group plan may be a good deal.
So is the Federal long term care insurance plan a good deal?
As far as group long term care insurance plans go, the Federal Employees plan is the best group long term care plan in the country.
The Federal long term care plan the only group long term care plan that does not reduce benefits for home health care.
It does not, however, offer discounts for married employees or healthy employees.
A single employee in fair health will find the pricing of the Federal Employees plan to be very competitive.
Married Federal employees, however, may be better off obtaining benefits outside of the Federal plan.
In our reviews, married applicants may save 30% to 50% on average by applying for an individual long term care insurance policy.
Comparing your long term care insurance choices and options may be daunting for you. But, we are specialists and will help you through the maze that is long term care insurance. Simply complete our long term care insurance quote request form to get started or call us direct at 1-800-891-5824 and find out what the best options are for you.
You may also want to get a copy of the free booklet, “A Shopper’s Guide to Long-Term Care Insurance,” published by the National Association of Insurance Commissioners.
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