Various employers and alumni groups are now offering group long term care insurance as a benefit to their employees. Most of the costs associated with these group plans are to be covered by the employees however, some employers will even offer minimal benefits in which employees can choose to purchase additional coverage for. This is especially enticing to those employees with health related issues, who would likely not qualify for individual long term care insurance on their own. Not only will they now qualify, but with a true group long term care insurance plan, they will also pay the exact same rate as even the healthiest individuals on the plan.
The higher risk associated with insuring the less healthier individuals on the plan, is dispersed or lessened by the lower risk associated with insuring the healthier individuals among that same plan. This lowers the overall risk for the group, allowing the rates to remain the same for all. This is why the long term care insurance companies are able to validate taking on those riskier clients with declining health, who will likely make a claim and require care against those healthier individuals who will likely not require as much attention. It essentially serves the same effect, as that of ripple created from tossing a rock into a small pond(individual plan), versus tossing that same rock into a much larger lake(group plan), the effects of the ripple or claim, are much smaller when tossed into the lake versus the pond.
This type of group long term care insurance plan, is typically most utilized by those employers with 500 or more employees, with most of this true group coverage, being commonly offered by two main insurers known as Prudential and Genworth. Another common option for those midsize employers with less than 500 employees, is to offer a group offering individual long term care insurance plan at a discount for all those who are eligible to enroll. This option is usually made available to employers by the insurer, when the employer has 10 or more employees that are eligible and wish to enroll. The discount given to the employees usually ranges from 5- to-10 percent however, keep in mind these individuals are less likely to be underwritten if they posses health issues.
According to a 2017 survey conducted by Genworth Financial which surveyed 1200 individuals, 68% of adults stated they would prefer to purchase a long term care plan through an employer versus a financial professional. If you are an employer with over 500 employees, you may want to consider adding a group long term care insurance plan to your employee benefits package.