Ways to buy long-term care insurance.
Private insurance companies sell long-term care insurance. Much like other forms of insurance, long-term care insurance may be purchased in a variety of ways such as an individual policy, a group policy through an employer of the federal and state government, through membership in an association, and as benefits through a life insurance policy.
Individual policies
Most long-term care insurance policies are sold to individuals. Individual policies can be very different from one company to the next. Each company may offer policies with different combinations of benefits. Be sure to shop around to get the coverage that best fits your needs.
Group policies
Your employer may offer a group long-term care insurance plan or offer individual policies at a group discount.
An employer’s group policy may be similar to what you could buy with an individual policy. An advantage of a group policy for active employees is that you may not have to meet any medical requirements or there may be a relaxed screening process. Many employers also let retirees, spouses, parents, and parents-in-law apply for this coverage. Relatives must usually pass the company’s medical screening to qualify for coverage and must pay the premium.
Generally, insurance companies must let you keep your coverage after your employment ends or your employer cancels the group plan. In most cases, you will be able to continue your coverage or convert it to another long-term care insurance policy. Your premiums and benefits may change, however.
Federal and state government policies
Federal and U.S. Postal Service employees, retirees, and qualified relatives are eligible to apply for long-term care insurance coverage through the Federal Long-Term Care Insurance Program. Private insurance companies underwrite the insurance, and the federal government does not pay any of the premiums. The group rates under this program may or may not be lower than individual rates and the benefits may also be different.
If you or a family member is a state or public employee or retiree, you may be able to buy long-term care insurance under a state government program.
Association policies
Many associations offer long-term care insurance to their members. Like other group policies, association policies usually give their members a choice of benefit options. In most cases, policies sold through associations must let members keep or convert their coverage after leaving the association. Most association policies will require you to go through the underwriting process to obtain coverage. Be careful about joining an association for the sole purpose of buying insurance coverage. Review your rights if the policy is terminated or canceled.
