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Types of LTC insurance

Weighing Group vs. Individual Policies

People assume that "group" automatically means a better policy at a lower price. For long-term care insurance, nothing could be farther from the truth. Certain drawbacks are quite common in these policies. If you are in relatively good health it is very likely you can purchase a superior individual policy at a lower price. Why is this case? Good question. First, recognize insurance companies don't give away anything for free. Many groups offer a form of "guaranteed issue," which means few people are denied some type of coverage. So in order to pay for these higher-risk people (generally estimated to be between 7% - 12% of all applicants), to remain profitable AND competitive, insurance companies dilute, or strip-down the policy's benefits and coverage.If you do a true "apples to apples" comparison between your group offering and an individual plan from LTCIS, a healthy person can normally purchase a better policy at the same or even lower price! So, make sure you compare!



Standard Insurance Strip Downs:


#1 Reduced Percentage Payouts for Assisted Living and Home Care


It’s a common practice to use lower payouts for these more likely modes of care. Nursing Home Daily Benefits are the highest reimbursement, generally offered at $150 per day. In group plans, very frequently the Assisted Living reimbursement level is reduced to a lesser amount, typically 70% of the Nursing Home Benefit, which would be $105 a day. Over six months, this would total a loss to you of $8100. Worse yet, the Home Care is often reduced to either 60% or 50% of the original Nursing Home value which over six months means a loss of $10,800. Given statistics have shown you have a greater chance of first using Home Care or Assisted Living care, and a lesser chance of using a Nursing Facility in your lifetime, it should come as no surprise that this is one of the best ways to limit the anticipated payout from a Group Plan.



#2 Does your group plan offer true Automatic Inflation Protection? FPO vs. CAIP vs. CPI




#3 Advanced Features


Group plans usually offer only the basic features of a long-term care policy. A few of the many advanced features available with individual market plans are:





Call us today at 800-500-5695 to get a free consultation so we can tailor a policy specifically for your needs.


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