2 Comments

Which is better: A Group LTCi policy or an Individually-purchased LTCi policy?

A healthy, married couple can usually get better benefits by purchasing a long-term care policy on their own, rather than buying a group long-term care policy through their employer.

Individually-purchased long-term care policies usually offer:

  • Preferred health discounts that save you as much as 25%, and
  • Marital discounts that can save as much as 40%.  (Marital discounts are even given for domestic partners, in most states).

Most group LTCi policies do not give any preferred health discounts.  And group LTCi policies usually do not give any discounts for being married.

But the biggest disadvantage to watch out for is that group LTCi policies are usually NOT Partnership-qualified policies.

Now that 39 states have “LTC Partnership programs” you can protect your assets even if your long-term care policy runs out of benefits.  Each dollar that your long-term care partnership policy pays out in benefits entitles you to keep a dollar of your assets if you ever need to apply for Medicaid services.

You do not have to buy an expensive “unlimited” long-term care insurance policy.  You only need to buy an amount of long-term care insurance equal to the amount of assets you want to protect for yourself, your spouse or partner, and/or your heirs.

Even if an individually-purchased LTCi policy were to cost more than a comparable group LTCi policy, this special asset protection offered by the LTC Partnership programs is probably worth the cost.

But, again, individually-purchased LTCi policies are often less expensive and have better benefits than group LTCi policies (especially for healthy couples).

Advertisements

About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.

2 comments on “Which is better: A Group LTCi policy or an Individually-purchased LTCi policy?

  1. From your site:

    “Most group LTCi policies do not give any preferred health discounts. And group LTCi policies usually do not give any discounts for being married”

    We bought an AARP group policy from Genworth 3 years ago and it has both of these features.

    Paul

    • Paul,

      I did qualify my statement with the word “Most”. Most group LTCi policies don’t offer preferred health discounts nor marital discounts. The main reason group LTCi policies don’t offer those discounts is because “true group” LTCi policies have easier underwriting standards. It’s easier to qualify as part of the group because they’ll offer the insurance to everyone in the group using “abbreviated underwriting”. “Abbreviated underwriting” means that anyone who is a member of the group can be approved for coverage if they can answer “no” to a few basic health questions.

      The AARP policy has “full underwriting” (e.g. they’ll review your medical history for up to the past 10 years to see if you are healthy enough to qualify for a policy.) Since they do “full underwriting” they are able to offer the preferred health discounts and the marital discounts.

      Word to the wise: After getting a quote from AARP, also get a quote for the same benefits directly from the sponsoring insurance company. You might be able to get the same benefits for less money by NOT buying the policy through AARP.

Comments are closed.