The Next Generation of Long Term Care Insurance

The latest iteration of the Federal Long Term Care Insurance Program (FLTCIP), FLTCIP 3.0, adds a premium stabilization feature, reports Government Executive . This is an adjustable amount computed as a percentage of the total premium paid for the policy, designed to lower the potential requirement for future premium increases. The provision accommodates a potential 50 percent decrease in premiums at age 85 if a sufficient amount of money is available in the premium stabilization fund, and if the beneficiary has been enrolled in FLTCIP 3.0 for at least a decade. The amount of the decrease will vary, based on the experience of the FLTCIP in the future. FLTCIP 3.0 also offers a potential refund of a portion of premiums at the time of death. The refund would be applicable to a reduction of any claims that were paid while the policy was in effect. These changes aim to address issues about the potential for future rate hikes, which have hounded the long-term care insurance industry since its launch.