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Advantages of personal or private Long Term Care Insurance vs Federal Long Term Care Insurance Prog. |
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Written by Drew Nichols
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Individual or personal Long Term Care
Insurance policies allow you vast more flexibility in plan design and choices
than the Federal Long Term Care Insurance Program.
The Federal program is only open to Federal
and US Postal Service employees, active members of the uniformed services, DC
government employees hired before October 1, 1987, and employees of the DC
Courts are eligible for the federal long term care insurance plans.
Qualified relatives and certain retired employees are also eligible.
The following chart goes over some of the
main differences between the Federal Long Term Care Insurance Plan and Private
Long Term Care Insurance:
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Compare the
Federal Long Term Care Insurance
VS
Private or
personal Long Term Care Insurance
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Federal
Long Term Care Insurance
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Personal
Long Term Care Insurance Plans
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Rate Classes
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Standard
Only
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Preferred
20% off Standard
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Spousal
Discounts
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None
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Yes (up
to 50% discount for spouse)*
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Discount
for two unrelated people living in same household (Gay and Lesbian
Couples Included)
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No
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Yes (up to
50% discount for 2nd person)
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Partner
Discount for two non-married people living together (Gay and Lesbian
Couples Included)
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No
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Yes, up
to 50% discount
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Benefit
Period Duration
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3, 5
years, lifetime
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2,3,4,5,6,8,10
years, or Lifetime coverage
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Elimination
Period Options
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30 and
90 days
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0, 30,
90, and 180 days
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Are
caregivers excluded from the informal care benefit if they live with the
insured?
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Yes
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No
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Home
Health Care Benefit (Percentage of nursing home benefit)
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75%
Only
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100%-125%
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Inflation
Options Available
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5%
compound, Purchase Options
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3%
compound, 5% compound, 5% simple
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Can you
pay in full or over a fixed number of years?
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No
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Yes, 10
or 20-year, as well as paid up at age 65.
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Indemnity
Benefit (Cash Benefit)
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No
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Yes
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As you can see from the above chart, there
are some major differences between an individually owned long term care
insurance policy and one purchased through the Federal Government Long Term Care
Insurance program. Many insurance companies offer major discounts when you
apply with your spouse (partner) (or anybody else living in your home with
you). The benefits can be tailored to your individual financial situation as
well. Typically an individually or private owned long term care insurance
policy will provide more coverage for less money almost every time.
The main drawback of the Federal Long Term
Care Insurance Plan is the higher cost and penalizing your Home Health Care
Benefits (the most popular part of the policy) by only giving you 75% of your
benefits. What that means to your check book is if in 20 years your
policy has grown to say $12,000 per month in benefits...get ready to pay
$3000.00 out of your own pocket because you essentially have a 25% deductible
for Home Health Care.
Individual plans will allow you to get more
benefits for less money from the exact same companies who under-write the
Federal Long Term Care Plan.
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