Insurance Continuing Education Online - Group LTC Plans

With Group LTC Insurance, some of the conventional features of group plans remain intact while other features are more similar to individual insurance policies.  First of all, the policies might actually be individual LTCI policies.  If so, the policies are fully "portable" if the employee leaves the plan and need not be converted in the traditional way.  Optionally, the employer‑sponsored LTCI plan may be set up like other group coverages, requiring employees who want to continue the insurance to convert to individual policies within a certain period after termination.  (This is called a conversion privilege and not all group insurance plans offer it.)



A feature that sets group LTCI coverage apart from other types of group insurance is who may be covered.  Most plans are offered not only to employees and their spouses, but also to the parents of both parties and, sometimes, to children and to retired workers.  In most cases, employees are exempt from medical underwriting ‑ they won't have to have a medical exam ‑ but it is likely that other family members must have some type of medical screening.  Know the requirements for policies marketed because some insurers require medical underwriting for all parties, including employees, while other group plans might not require medical information about any of the parties.  In some cases, even if medical underwriting is required, it is less stringent than for individual policies, especially for older parents.  The NAIC's shopper's guide encourages older people to investigate their children's Group LTCI coverage if available, indicating that, while medical screening is likely, group coverage might be more advantageous than individual policies.


The age at which individuals may purchase employer‑sponsored LTCI coverage is often earlier than the age minimums for individual policies.  Typical existing plans specify ages 30, 35 and 40 as the minimums and at least one plan designed by a large corporation is offered to 20‑year‑olds.  While there are individual policies insuring at these earlier ages, they are fairly rare.

Upper age limits vary considerably but generally are similar to individual policies, ages 79 to 85 being typical maximums for purchasing coverage.

Employer‑sponsored LTC Insurance may be virtually identical to individual policies marketed.  In fact, this would apply to the policy discussed in the Pseudo-Group discussion later in this text.  Most offer a range of daily benefit amounts, benefit periods and elimination periods.  One should always be aware that in many of the existing plans, the employer has worked with the insurance company to decide on the range of features from which employees can choose.

While the employee makes the final choice, the options available may be pre‑selected and, therefore, more limited than with an individual policy.

As for the availability of other benefits and provisions that are found in individual policies, group LTCI plans vary considerably but there is a trend toward including more benefits.  Some existing employer‑sponsored plans include or make available inflation protection, Nonforfeiture or return of premium features, death benefits, reinstatement, restoration of benefits, home care benefits, and others.  Group plans usually pay for care at several levels, have no prior institutionalization requirements, and cover care for Alzheimer's and other organic brain disease.  Exclusions and pre‑existing conditions limits are similar to those in individual policies.

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