What Is Group Long Term Care Insurance?

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   William Bridgers

   Specialist, LTCi, DI, Annuities, Life, Designs In Life, LLC, Utah

   In the land of Long-term Care Insurance (LTCi), the word "group" roughly means "guaranteed issue".  Guaranteed issue means that all one has to do is apply and coverage will be issued - no formal underwriting.  It takes a pretty big group for an insurance company to take on the risk of true group LTCi.  I don't believe any carriers provide it anymore, although much of it was sold previously and is still in force.  Some carriers will still write "simplified issue" group wherein the applicant must answer 4 or 5 questions in the negative to qualify.  If they answer "yes" to any of the questions, the insurance company may still consider them, but only if they authorize the insurance company to look at their medical records and maybe call them for an underwriting interview over the phone.  Only a few carriers are still in this market segment of LTCi, however.  Carriers will provide a small discount of 5% or so to smaller numbers of applicants that are successfully underwritten and all work for the same employer.  The minimum number depends on the carrier, but it is usually a minimum of 5 - 7 FTE.  This is called "multi-life" long-term care insurance and is not true group.  But, people refer to it that way.Multi-life underwriting may be "simplified", or "modified- simplified".  Regardless, some underwriting does take place and a person may not qualify medically.  In the past, if enough people in a multi-life situation qualified for coverage, a carrier would accept one person who didn't qualify medically and issue a base contract of coverage to that person.  That accommodation is not actively marketed these days and may only be available under special conditions.  With a multi-life policy, the insured owns his/her own policy and can take it with them when they leave employment.  The discounted premium is portable, too.Multi-life may be worth looking into if the company only wants to insure executives, owners or key occupation classes.  LTCi is not yet subject to ERISA rules, so companies can "carve out" who they want to provide this kind of insurance to.  Payment of premiums by the corporation (especially C-corps) may qualify as a health insurance expense and deductible for tax purposes, as well.  But, before assuming any special treatment of premium payments, one should consult with a qualified tax professional.Otherwise, there is no true group  LTCi and fewer "deals" any more for LTCi.

   Answered on July 8, 2013

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