Considering the 2024 spike in premiums for enrollees in Federal Long Term Care Insurance Program (FLTCIP), combined with the continued freeze on new FLTCIP applications, federal workers may want to consider other options for purchasing LTC insurance. Here’s what you need to know before you make a decision.
Duration Of LTC Benefits
You can purchase a policy that covers LTC costs for a year to as many as five years. The amount of your premium is based on the benefits included in the coverage you buy along with your age, gender and other factors.
When LTC Insurance Pays Benefits
Before your LTC coverage kicks in, certain conditions required by the insurance company must be met. Benefits are usually triggered when you’re unable to perform specified activities like bathing, dressing and eating or if you’re suffering from Alzheimer’s disease.
“You can choose to pay for the first 30, 60 or 90 days, or even opt for no waiting period at all.”
LTC Insurance Waiting Periods
A LTC insurance waiting period works like an insurance deductible and factors into the cost of your premium. It’s the amount of time before a policy begins paying benefits after you meet the requirements. During the waiting period, you have to pay the cost for LTC out of pocket. You can choose to pay for the first 30, 60 or 90 days, or even opt for no waiting period at all. Keep in mind that different insurance companies calculate their policy waiting period differently.
The Maximum Daily Benefit & Maximum Policy Benefits
The daily maximum is the amount your LTC policy will pay for each day of care. It can be different for a nursing home verses other types of care like assisted living or in-home care. As a result, it’s important to compare how different companies calculate the maximum daily amount they’ll pay before you buy a policy. The maximum policy benefit is the total dollar cap your LTC policy will pay when you begin using your benefits. The maximum policy amount can last longer depending on the type and cost of your care.
LTC Insurance Inflation Protection
Common sense tells us the cost of long term care in a facility or at home will rise over time due to inflation. Inflation protection increases the value of your benefits by a pre-determined percentage over a period of time. Insurance companies usually offer you options to add inflation protection when you purchase your policy and at periodic intervals.
Without LTC insurance, the out-of-pocket cost of custodial care in a facility or at home can potentially wipe out your TSP account. Don’t risk it. Meet with an FRC® trained advisor to learn more.
