My wife and I enrolled in the Federal Long Term Care Insurance Program’s Future Purchase Option when it was first offered in the early 2000s. Our monthly premium for Mary was $35.59, and I was paying $37.98 for 5 years of coverage with a maximum lifetime benefit of $228,125. The daily benefit amount was $125.
When I first enrolled in this program, I knew the insurance amount wouldn’t cover the entire cost of our care, or that we might need coverage for the entire benefit period. However, it would cover about 60-70 percent, and we would cover the remainder with savings.
Long Term Care Basics
Long-term care insurance kicks in when an individual is no longer able to perform at least two of the six Activities of Daily Living (ADLs) or has a severe cognitive impairment. There is typically a waiting period, known as an elimination period, which can range from 30 to 90 days or more.
The ADLs are as follows:
- Bathing
- Dressing
- Eating
- Toileting
- Transferring (e.g., moving from a bed to a chair)
- Continence
Long-term care also includes the supervision you might require due to a severe cognitive impairment, such as Alzheimer’s disease. Your doctor must certify that long-term care is medically necessary.
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The Future Purchase Option
This option was the lowest cost for us at the time and allowed us to increase our coverage periodically without undergoing medical underwriting. Every two years, we received offers to expand our coverage, and we agreed to the premium and coverage increases until the offer we received last month.
Our benefit period was reduced from 5 to 3 years over the years, and premiums have increased substantially since we first signed up. In the last offer we received, my monthly premium increased from $163.06 to $ 193.59, with a corresponding increase in the maximum lifetime benefit from $260,434 to $277,779. Mary’s monthly premium increased from $153.23 to $184.54 with the same corresponding maximum lifetime benefit.
We declined the offer, and our premiums and coverage will remain at the current level for another two years. The increase of approximately $30 each, or $720 a year, for the two of us seemed high for a $17,000 increase in total lifetime benefits and only a $16-a-day benefit increase. Our daily benefit amount will remain at $237.84 or $7,135 per month.
Opting Out of a Future Price Offer (FPO)
We selected Option 2 to decline the FPO increase. With this option, your premium, daily benefit amount, maximum lifetime benefit, and benefits remain the same for the next two years. If you decline a total of three FPO offers, you must provide evidence of your good health by completing a full underwriting application to receive future FPO offers.
At our age, my wife and I didn’t feel their offer was worth the additional costs. In two years, we will receive another offer and two years after that a third. We can take advantage of future coverage increases if desired or remain at the current levels and premiums for the remainder of our lives.
If you agree to the additional coverage, you do nothing, and the increases will take effect on January 1, 2026. To decline, you must submit the 2026 Future Purchase Option Selection Form, fill in the oval for option 2 to decline the offer, sign the form, and send it to the FLTCIP offices in Portsmouth, NH.
Final Words
Many private insurers canceled their long-term care programs due to rising healthcare costs across the board. The premiums we are paying are only as low as they are because we signed up in 2002 when the program first started, and we didn’t opt into the higher coverage options. The younger you are, the lower your long-term care premiums will be, so it’s best to sign up while in your mid-career or earlier.
That being said, when we add up all the insurance premiums we pay for literally everything, insurance costs are one area where we can realize significant savings by shopping around. We recently received three homeowner’s insurance quotes in another state. The cost for comparable coverage from three providers ranged from $545 a year to close to $3,000! It does pay to shop around.
Helpful Retirement Planning Tools
- Financial Planning Guide for Federal Employees and Annuitants
- TSP Guide
- Free Retirement Planning Report
- Budget Worksheet
- Retirement Planning for Federal Employees & Annuitants
- The Ultimate Retirement Planning Guide – Start Now
- Deciding When To Retire – A 7-Step Guide
- 2026 Federal Employee’s Leave Chart
- Medicare Guide
- Social Security Guide
Disclaimer: The information provided may not cover all aspects of unique or special circumstances. Federal regulations, medical procedures, investment information, and benefit details are subject to change. To ensure the accuracy of this information, contact relevant parties for assistance, including OPM’s retirement center. Over time, various dynamic economic factors relied upon as a basis for this article may change.
The information contained herein may not be suitable for your situation. This service is not affiliated with OPM or any federal entity. You should consult a financial, medical, or human resource professional where appropriate. Neither the publisher nor the author shall be liable for any loss or other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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Dennis V. Damp is an author, retired federal manager, business owner, career counselor and veteran. Damp is the author of 28 books, a recognized benefits expert, and a retired federal manager with 35 years’ service. Dennis has been a guest on hundreds of radio talk shows, CNN’s YOUR MONEY and the Lou Dobbs Cable TV shows, lectured at universities and colleges, produced Internet web sites and training videos, and has written hundreds of articles for national magazines and newspapers. His books have been featured in the Wall Street Journal, Washington Post, New York Times and U.S. News & World Report.
Dennis joined the Air Force in 1968 and spent over three years on active duty and an additional seven years with the Air National Guard. He was hired by the Department of Defense (DOD) after leaving active duty and transferred to the Federal Aviation Administration (FAA) in 1975. He spent the remainder of his career in various positions with the FAA. His last position was technical operations manager at the Pittsburgh International Airport’s air traffic control tower.
