Design a Plan

There is no one-size fits all when it comes to long term care insurance. To design a Federal Long Term Care Insurance Program (FLTCIP) plan that is best for you, first it's important to understand the cost of care.

Then, there are three key decisions you need to make:

Choose a daily benefit amount

The daily benefit amount (DBA) is the maximum amount we will pay per day for covered services. The FLTCIP offers $100 to $450 daily benefit amounts in $50 increments.

Use the daily cost of care in your area to help select a daily benefit amount.

Choose a benefit period

The benefit period is the length of time benefits will be paid if you receive benefits every day equal to your daily benefit amount. If you receive services that cost less than your daily benefit amount or do not receive services every day, your benefits will last longer. The FLTCIP offers 2, 3, or 5 year benefit periods.

As a general guideline, 70% of people over 65 need long term care at some point in their lives and women usually need care longer (3.7 years) than men (2.2 years).1

1 U.S. Department of Health and Human Services. "The Basics," https://longtermcare.acl.gov/the-basics/ (accessed July 2019).

Choose an inflation protection option

Inflation protection helps your benefits keep pace with inflation and the rising costs of care. If inflation continues to average 2.55%2 every year, in 20 years the average annual cost of care in a nursing home will increase from $91,6153 to $151,593.

The FLTCIP offers two types of inflation protection:

Automatic Compound Inflation Option

Automatic compound inflation option (ACIO) means your daily benefit amount and maximum lifetime benefit will automatically increase by 3% compounded every year without a corresponding increase to your premium.

Future Purchase Option

Future purchase option (FPO) means every two years we will offer an increase to your daily benefit amount and maximum lifetime benefit based on the change in the U.S. Department of Labor's Consumer Price Index for All Urban Consumers, All Items (CPI-U). If you accept the offer, your premium will also increase. If you decline the offer three times, we will no longer offer increases to your coverage until you provide evidence of your good health that is satisfactory to us.

Compare options

1 U.S. Department of Labor, Bureau of Labor Statistics. "Historical Consumer Price Index for All Urban Consumers," 30-year average from 1989-2018, bls.gov/news.release/cpi.t05.htm (accessed July 2019).
2 John Hancock Life & Health Insurance Company. "John Hancock 2016 Cost of Care Survey," conducted by LifePlans, Inc., September 2016.

Things to keep in mind...

Maximum lifetime benefit

Your maximum lifetime benefit (MLB) is equal to your daily benefit amount multiplied by your benefit period (in days). This is the total amount we will pay for your covered services.

Example:
$150 DBA x 1,095 days (3 year benefit period) = $164,250 MLB

90 day waiting period

The waiting period is the number of calendar days you must be eligible for benefits before we will pay the benefits of your plan. It's similar to a deductible for other types of insurance such as health or car insurance. The FLTCIP has a 90 day waiting period.