With effect from December 19, 2022, the Federal Long-Term Care Insurance Program (FLTCIP) will no longer accept applications for new policies. During this time, the program’s insurer, John Hancock Life and Health Insurance Company, and administrators will reevaluate the program’s costs and benefit levels. Long-Term Care Insurance: What Is It? Caution: the decision to purchase long-term care insurance is complex, and this article does not attempt to answer every possible question. Extra research is needed to determine the best next steps. If the policyholder needs a specific kind of long-term care, they will benefit from the insurance company. Some health insurance plans will pay for medical attention obtained in a nursing home, while others will pay for similar attention done at home or in another setting. You must know that LTC insurance policies rarely pay for 100% of care costs. The benefits provided by a plan may be subject to a waiting period, eligibility requirements, and either daily or lifetime limits. Long-term care insurance may partially offset costs associated with prolonged dependence. Given the range of available alternatives, it’s critical to fully understand the details of any plan you’re considering signing up for. Who Qualifies for the Government-Sponsored Insurance Program for Long-Term Care? Former and present federal workers and members of the armed forces and their families may apply for coverage under the Federal Long-Term Care Insurance Program (FLTCIP). Members of the Selected Reserve, the National Guard, and those on active duty for more than 30 days fall under this category. Those who have retired from the military but are still waiting to receive their retirement benefits are included. Family members of qualified individuals include spouses, adult children, and domestic partners. If the employee is still actively serving, their parents are eligible, but retirees are not. How will this suspension affect you? You should move quickly in choosing whether or not the government program is suitable for your needs if you are considering obtaining long-term care insurance. A FLTCIP application received by 11:59 p.m. (Eastern Time) on December 18, 2022, will be handled promptly. The application period will close at that time, and submissions will only be accepted again once the program is reopened. Officials estimate that 24 months will pass before the program is reactivated. When Should You Consider Purchasing Long-Term Care Insurance? The standard response to questions about one’s financial situation is “It depends.” The term “personal finance” is used on purpose. One person’s problem may have nothing in common with another. When it comes to long-term care planning, most financial advisors classify their clients into one of three categories: Members in Group A will be forced to rely on Medicaid services because they will never be able to save enough money to pay for long-term care privately. Long-term care insurance is not a choice they must make. Those in Group B don’t need long-term care insurance since they have enough assets to cover their care out of pocket. Long-term care insurance is not a choice they must make. People in Group C can afford the premiums for long-term care insurance and would rather have the peace of mind of knowing that the benefits will be there if they ever need them. These individuals are the ones who must decide whether or not purchasing long-term care insurance is a wise financial move. Alternatives to Long-Term Care Insurance Buying long-term care insurance is one approach to preparing financially for the cost of long-term care. Additional options include annuities with long-term care riders, health savings accounts, “hybrid” life/long-term care insurance policies, and temporary care plans. You should include long-term care planning in your financial strategy, but remember that not everyone will require such services. Despite the difficulty in obtaining accurate figures, it is projected that more than 70% of the general population will require long-term care at some point. The great majority of LTC stays, however, are less than one year. While this is true, a sizable population also needs long-term care for more than five years. Unfortunately, there is never a perfect answer to any issue. Each decision must be based on the best available data at the time. Before the government program stops accepting new applications, you should gather information and decide if you are considering long-term care choices.
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Bio:
I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.
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