Retirement & Financial Planning Report

The period approaching retirement or in early retirement years is a common time to seriously consider taking out long term care insurance, for those who don’t already have it. One advantage of the Federal Long Term Care Insurance Program is that its flexibility relieves some of the obligations for pre-planning.

For example, in the FLTCIP, eligible persons, including both employees and retirees, may initially enroll at any time. Except for those being first hired and their spouses, who undergo a shortened form of underwriting, the same, full, underwriting applies regardless of whether the enrollment is being done as an employee or as a retiree.

Because of its open enrollment feature, FLTCIP does not have a requirement, such as the FEHB health insurance and FEGLI life insurance programs have, that retirees generally must have been covered for the five years before retirement in order to continue the benefits. Thus, there is no need to make sure FLTCIP coverage is in place for that period, unlike in those programs.

In addition, while FEHB coverage can be changed outside an open season only when certain life events occur—such as marriage or the birth or adoption of a child—an FLTCIP enrollee can change coverage levels at any time (outside its rare open seasons, FEGLI allows changes for life events or, for active employees only, on presenting proof of insurability).

An FLTCIP enrollee can decrease to any options available under the program, and premiums (which will be based on the age at the original grant of coverage) will also decrease. Enrollees do not have to undergo new underwriting in order to decrease coverage. However, there is no “paid-up benefit” crediting for premiums already paid for a higher level of coverage.

An enrollee also at any time may request an increase in coverage. However, the enrollee would have to provide, at his or her own expense, evidence of good health that is satisfactory the carrier. The additional premium will be based on the enrollee’s age and the premium rates in effect at the time the increase takes effect.

An FLTCIP enrollee may cancel coverage at any time.

More on the Federal Long Term Care Insurance Program at ask.FEDweek.com