It’s official: effective December 19, 2022, through the next 24 months, the Federal Long-Term Care Insurance Program (FLTCIP) will not be accepting new enrollment applications. The suspension also applies to requests by current enrollees to increase existing coverage.
This comes after a June report indicating the need to increase FLTCIP premiums and/or restrict benefits to mitigate the cost of increased insurance claims. Keep in mind that, at the end of the 24-month suspension, the OPM has the authority to extend the suspension another 24 months.
What To Do If You Were Planning To Purchase FLTCIP Coverage
If you were planning to purchase FLTCIP coverage as a part of your overall retirement plan, you can always purchase a Long-Term Care (LTC) policy from a range of private sector insurance carriers. However, since healthcare costs are rapidly rising, it should come as no surprise that private sector LTC insurance premiums are also increasing.
While shopping for a policy it’s important to understand that there are ways to reduce your coverage benefits to lower your premium. For example, a policy with a five-year maximum payout will be less expensive than an open-ended policy. Or, you can also lower your premium by extending the policy waiting period before you collect benefits. In general, when compared to FLTCIP, private LTC policies offer more flexible options to customize coverage.
“Also known as Critical Illness Insurance, it covers specific emergencies like heart attack, stroke, cancer, coronary bypass and organ transplants.”
Affordable Alternatives To Long-Term Care Insurance
Short-Term Care (STC) insurance, also known as Convalescent Insurance, is one option. Policies typically cover in-home care, assisted living, and nursing homes for 12 months or less. With premiums ranging from $100 to $125 per month, it’s highly affordable.
If you have a family history of certain types of medical issues, consider Critical Care insurance. Also known as Critical Illness Insurance, it covers specific emergencies like heart attack, stroke, cancer, coronary bypass and organ transplants. Typically, you’ll receive a lump sum payment to cover out-of-pocket costs and premiums are highly affordable.
Annuities With Long-Term Care Riders
There are a number of advantages to purchasing an annuity with a Long-Term Care rider. It gives you a stream of guaranteed retirement income while the LTC rider can be used tax-free to pay for non-medical, custodial care in a nursing home. If it turns out that the insured did not need LTC coverage, beneficiaries can likely collect the accumulated value of the annuity.
Meet with an FRC® trained advisor to learn more about these and other insurance products that can offer an affordable alternative to the Federal Long-Term Care Insurance Program.
