By Lawrence Shannon-Missal - LTCinsurance.Com

We provide this free financial resource concerning long term care insurance to visitors of the Community Room of SeniorSSuperStoreS in an effort to keep baby boomers, seniors and the elderly informed of matters that can affect their financial lifestyle.

If you're a government employee, you may already be aware that the U.S. Office of Personnel Management has announced that Metropolitan Life Insurance Company and John Hancock Life Insurance Company have been selected as the insurers for the Federal Long Term Care Insurance Program. This effort will provide an employee paid plan for group Long Term Care Insurance to an estimated twenty million federal employees.

Metropolitan Life and John Hancock have formed Long Term Care Partners, LLC, a jointly owned entity devoted exclusively to operating the Federal Long Term Care Insurance Program (FLTCIP). With this program approaching fast, now is a better time than ever to re-examine the advantages and disadvantages of a group LTC policy, versus an individual plan. This applies not only to federal employees but also to millions of other Americans who have been or will soon be offered group LTC plans by their own employers.

The question on most people's minds is simple - which is the superior option, the group plan I'm being offered or an individual policy I may be able to find for myself, with the help of an LTC professional. This decision, however, is far less cut-and-dry than most consumers may think. What is best for you depends largely not only on what you are looking for in an LTC plan, but also on your personal circumstances.

A potential weakness of group plans revolves around the issue of in-home care. Statistically speaking, in-home care is consistently the preferred option of LTC consumers. Ed Neveleff, CLTC, CSA says, "Most of my clients, particularly those who are married, view home care as their preferred option. If they end up needing care, they would like to receive it at home if at all possible - facility care is seen as a last resort." However, most group plans (including the federal plan) do not allow for the full daily benefit amount to be provided for in-home care - only for nursing home care; only 50-75% of total daily benefits are allowed if the policyholder is receiving care in their own home.

Some would argue that 100% of the daily benefit for in-home care is unnecessary, as these costs are often lower and can be supplemented with help from family members. However, professional home care costs can meet or even exceed the cost of institutional care. While this may seem like a problem only for those without a family, Long Term Care recipients should think long and hard about the financial and emotional tolls their care could mean over time. Family members who assist with care often suffer financial burdens themselves, as well as emotional and physical stressors. Primary in-family caregivers show a rate of depression as much as six times the national average. So, whether you have family who can help with your care or not, having less than 100% of your coverage available for in-home care is certainly a factor to at least consider.

Another factor which warrants attention is inflation coverage. Many individual policies have an automatic, or built-in, inflation benefit. As Scott A. Olson, CLTC explains, "'Automatic Inflation Benefit' means that the daily benefit will automatically grow each year. The increase in daily benefit each year will not cause your premium to increase." While this can be opted for on an individual program, Olson further explains that group policies tend only to have "Future Purchase Options," wherein the recipient can annually choose to increase their benefits in order to contend with inflation, but only at an ever-rising cost.

Another common difference between individual and group policies lies in the underwriting process; group policies (including the federal plan) often employ short form underwriting, meaning that there are less specific, less stringent guidelines ruling who can and cannot be approved for coverage. Individual policies, in contrast, employ a far more involved underwriting procedure making it harder to qualify but insuring a lower risk for the underwriter, and thereby offer a lower, more stable premium for the recipient.

As you can see, there is much to consider regarding an individual LTC policy over a group one. Perhaps the group policy you are being offered DOES offer 100% in-home care benefits, or perhaps being at home is not even an issue for you. Perhaps the plan in question does indeed account automatically for inflation. One agent described group LTC plans as being "'cookie cutter' in that they have very limited options and flexibility. I have seen some plans where I can offer better coverage for the buck. On the other hand, sometimes it is a slam dunk way for them to go. It depends on the carrier, plan, etc."

As the new Federal Long Term Care Insurance Program unfolds, many questions will be raised by millions of people. The important element for government employees will be to learn as much as they can about the federal option and options provided by local Long Term Care Insurance professionals.

This article has been brought to you by LTCinsurance.com, your resource for unbiased information on Long Term Care Insurance. LTCinsurance.com is not an insurance company, nor do they provide Long Term Care Insurance. If you would like to read more about Long Term Care Insurance please visit www.ltcinsurance.com.