Here
we are months after the federal governments long term
care insurance program went into effect and, as usual,
people are confused. I think its great for the government
to finally take action regarding the need for long
term care insurance protection and to help its workers
obtain and understand the long term care coverage they want
and deserve. In July of 2002 eligible members of the
federal government could purchase long term care insurance
for themselves and other eligible members of their family.
A great job by public relations and press coverage has many
Americans talking about their long term care insurance
needs and most of them are not able to purchase the government's
long term care insurance plan. I applaud the efforts
of the federal government to encourage employees to take matters
into their own hands and to explore buying the federal long
term care insurance program protection, but I also must push
them to explore long term care insurance policies offered
by the private sector since there are many reasons this may
be more beneficial.
Observation:
Over the next 30 years our population over 65 will increase
60% while tax-paying workers will only increase by 4%.
Is
the federal government long term care insurance program the
best deal for interested buyers? This is the real question
at hand and I am going to make every effort to provide you
with the kind of objective information you need to help answer
this question for yourself.
First,
lets take a minute to look at the source of the federal long
term care insurance program coverage. Metropolitan Life
and John Hancock have combined to form a new entity just for
the federal government long term care insurance program.
These are certainly companies with the reputation and financial
ability to pay claims for the long term. I question
whether the fact that they have no competition plays a part
in why they have produced a relatively expensive long term
care insurance product with limited features and benefits.
Hmmm. I wonder? With that being said, its a fact that
the open market offers long term care insurance to the potential
insured by many carriers who offer equal or perhaps even better
financial stability than the new entity formed by combining
the efforts of two large competitors. Who runs this
company and makes decisions when perhaps these long term care
insurance policy competitors disagree with each other?
Personally, Id rather buy long term care insurance directly
from either carrier. My point is that there is nothing
special here that can't be found in the open market.
Im sure Prudential, Transamerica and GE feel slighted.
There is nothing stopping the government worker from buying
long term care insurance directly from a long term care insurance
company so far in fact an incentive to look at what else is
out there exists.
Observation:
Over 11,000 baby boomers a day turn 50.
Second,
long term care insurance coverage is the next item for careful
scrutiny. The federal government long term care policy
is a hybrid of a group long term care policy and an individual
long term care policy creating a program that is basic and
limited at best. Lets look at a few examples.....
Most people want to stay home for the longest possible
amount of time before moving to a full service long term care
facility. Why then is the daily home health care benefit
available only up to 75% of the value of the nursing home
coverage amount? Most long term care insurance
policies offered by insurance companies have the ability to
opt for 100% of the long term care facility coverage.
Also, the benefit period or the length of time your long term
care coverage is good for is limited. I believe
many people don't know how long they will need long term care
insurance for a nursing home stay and are more comfortable
with a plan that covers them for as long as they live.
Not so for the federal government long term care insurance
program.
Observation:
Less than 6% of the eligible population owns a long term care
insurance policy.
Third,
price is always a consideration for consumers. The federal
long term care program is not as inexpensive as I was hoping.
My step dad is a retired government worker. We had high
hopes of obtaining a better priced long term care insurance
policy than we could get from insurance carriers directly
only to find out that when we compared the long term care
coverage apple to apple there were no savings to be found.
I can only recommend that everyone explore all options before
making a buying decision. Get prices from both sides
and compare the two and you'll see what I mean. It's
possible to get better coverage and still save money by getting
long term care coverage outside the federal government's long
term care insurance program.
Observation:
Baby boomers are realizing that they are likely to be living
30 years in retirement.
Fourth,
underwriting and qualifying is the only area I may concede
that the federal long term care insurance program could be
better for buyers. If you qualify for the government
program and you have health conditions that prohibit you from
being approved by a private carrier you may have no other
choice other than buying the government long term care program.
I would call a specialist like the ones you find at www.long-term-care-insurance-rate.com
or www.long-term-care-policy.com and ask them if you have
questions regarding underwriting and health related issues.
Often people with pre-existing conditions still get approved
for long term care insurance coverage. Many of the eligible
buyers of federal long term care insurance program coverage
do not receive any special underwriting considerations and
are fully underwritten the same way they would be outside
the federal government long term care insurance program.
Observation:
People over fifty use twice as much health care as those in
there twenties, almost four times as much by the time they
hit sixty. As the population ages the cost of health
care rises.
If
that's not enough to get you motivated to look at all your
options I don't know what is.
Lets recap my comments: You may get better long term
care coverage at a lower cost with a solid insurance company
by shopping outside the federal government's long term care
insurance program!
By:
Todd C. Hylton CEO
InsuranceNetCenter, Inc.
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