At the end of the day, the pros and cons of purchasing Long-Term Care (LTC) insurance depend entirely on your personal situation – from your finances to your overall health and more. As a federal employee, you have the ability to purchase this type of insurance through the Federal Long Term Care Insurance Program (FLTCIP). Keep in mind, the government does not pay a portion of your premium – the cost is 100% your responsibility. You also have the option of purchasing an LTC policy from the private insurance market. But first you have to decide if you need it or want it.
Long-Term Care: The Basics
Long-term care is assistance with day-to-day activities you’re unable to perform on your own: dressing, bathing, eating, using the bathroom and basic custodial care. While your primary healthcare insurance, FEHB or Medicare, usually covers approved medical treatment when you’re in long term care, it will not cover the cost of your non-medical, custodial care. Recent statistics show 68% of people who are 65 and older will require long term, custodial care either at home or in a facility.
“Recent statistics show 68% of people who are 65 and older will require long term care, custodial care either at home or in a facility.”
Consider The Pros Of Long Term Care Insurance
- Peace of mind – you don’t have to worry about imposing on family if you can’t take care of your basic needs.
- It’s worth the cost if there’s a very good chance you’ll need it. Look into your family history and do your best to calculate your longevity.
- It helps cover the high out-of-pocket-costs of custodial long term care. Depending upon where you live, it can cost as much as $10,000 per month or more.
Consider The Cons Of Long Term Care Insurance
- It’s hard to estimate how much LTC insurance you’ll need. If you purchase less than you’ll need, you’ll have to use your nest egg to pay the difference. If you purchase more than you need, that money is lost forever.
- You may not qualify. The FLTCIP is a John Hancock insurance product. The company’s underwriters can decide not to cover you. The same applies when you purchase LTC insurance in the private market.
- LTC insurance premiums can increase over time. This is true whether you purchase the government’s FLTCIP or a private policy.
Take the time to compare FLTCIP to private LTC insurance plans to see what’s out there. You may want to consider working with an FRC® trained advisor who can help you look at other ways to cover the cost of long term care in retirement.
