Mutual of Omaha Suspends Long Term Care Insurance Group Plans

Mutual of Omaha announced the upcoming suspension of their Multilife Long Term Care Insurance group plans.

Suspension of Group Plan Sales

This week in the company’s blog, Mutual of Omaha notified the public that effective July 1, 2013, a 60 day enrollment period will begin for Multilife groups already in existence to be able to enroll eligible new employees. After the enrollment period ends on September 1, 2013, no new applications will be accepted by the Multiife Underwriting department.

Any applications dated or received after September 1, 2013 will not be accepted. Questions regarding the new Multilife LTC update can be directed to the Mutual of Omaha Sales Support team by phone at (800) 693-6083 or by e-mail at drew@ltctree.com 

Group Plans: Are They a Good Deal?

Oftentimes, the first time people hear about Long Term Care Insurance is in the workplace. Many employers have begun to offer Long Term Care Insurance group plans for their employees. Although it may seem tempting to join the group, it is not safe to assume that because it is a “group plan”, you will get a better deal. In reality, the opposite is usually true.

If you are in good health, buying your employer offered Long Term Care Insurance group plan is probably not your best bet, as noted in this recent Wall Street Journal article. Group plans lump all employees together in the same health tier, which means if you are in good health, you may be missing out on discounts. Most carriers offer a preferred health tier for those applicants who are in good health, and if your co-workers are not as healthy as you are, the health discount will likely not be an option for your group plan.

long term care insurance group planOther Discounts

There are more discounts available besides the preferred health tier discount, and chances are, your employer offered group plan will not have those discounts as an option.

Spousal discounts are one of the most common discounts people receive. If you purchase an individual Long Term Care Insurance policy for both you and your spouse or partner, you will typically get a premium discounted by about 40%. This is a huge savings that cannot afford to be forgone by most people, especially if you are on a tight budget.

Inflation protection is the most important rider that policyholders can add to their plan. However, Long Term Care Insurance group plans have limited options for inflation protection, which can put you at a higher risk. Inflation has been rising steadily yearly. The average nursing home cost was around $85,000 annually. That number is expected to jump to $100,000 by 2015. That price represents an 18% increase in just 3 years, solely due to inflation. Simply put, inflation is a huge risk, and protecting yourself from that risk is a smart move.

In-Home Health Care

Another big problem with Long Term Care Insurance group plans is the limited coverage of in-home health care. Although the first thing most people think of when they hear the term “long term care” is nursing homes, these kinds of facilities are simply not the most common form of care.

For every 1 person receiving long term care in a nursing home, there are 4 people receiving long term care services in the comfort of their own home. It makes sense why people would want to stay in their own home, but for some reason, coverage of such care is often the features that Long Term Care Insurance group plans cut first. Many group plans will cover only 75% of in-home health care costs. Some policies cover only 50%.

These are the small details of a policy that make the biggest difference. Without inflation protection and full coverage of in-home health care, even if you have insurance, you may still end up paying for a large portion of your care out of pocket.

The Verdict?

Almost always, you will be able to get a better rate for an individual plan than you would a Long Term Care Insurance group plan. If your employer offers you a group policy, do your research before purchasing anything. Get a second opinion from an independent Long Term Care Insurance specialist. That way, you know you are getting an unbiased evaluation of the policy, rather than a business pitch to buy from another company that pays that agent to be promoted.

LTC Tree is an online insurance marketplace comprised of Long Term Care Insurance specialists who can help you compare the top 5-6 providers and policies. We will work to find you the lowest rate and the best coverage that fits your specific needs and budget, and we will do it in a no-pressure environment. Call us for a rate today at 1-800-800-6139.

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