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Is federal long-term care insurance worth it?

Long-term care insurance can provide valuable protection for those who need in-home care. Getty Images

As you age, you may require care in an assisted living facility or from a live-in caregiver. Unfortunately, most healthcare plans don't cover the costs of these services — costs that can range anywhere from $1,700 to $9,000 per month, according to recent estimates. Fortunately, an additional type of insurance — dubbed long-term care insurance — can.

Long-term care insurance comes in two forms: Private long-term care insurance, which is offered through private insurance companies and federal long-term care insurance. The latter is offered by the federal government and is only available for certain government employees. 

Are you eligible for both types of long-term care insurance? Below, we'll break down how to choose which long-term care insurance to buy.

Start by getting a free long-term care insurance price quote here to learn more.

Is federal long-term care insurance worth it?

Here's what to know when trying to determine if federal or private long-term care insurance is the better choice.

When federal long-term care insurance is worth it

The most important thing to note about federal long-term care insurance is that not everyone is eligible for it. In fact, federal long-term care insurance is only an option if you're:

  • A federal employee who's eligible for the Federal Employees Health Benefits program
  • A U.S. Postal Service employee
  • An active-duty military member 
  • A full-time National Guard member
  • A member of the Selected Reserve
  • A Tennessee Valley Authority employee
  • A D.C. government employee first employed prior to Oct. 1, 1987
  • An employee of D.C. courts
  • An employee of the Commander, Navy Installations (CNIC) 
  • An NAF employee in the Army, Marine Corps, Navy Exchange Service Command, Army and Air Force Exchange Service, and Air Force

If you've retired from the above careers, you are also likely eligible. 

But just being eligible for federal long-term care insurance doesn't mean you should automatically choose it. As Tom Beauregard, CEO of aging-at-home platform HCG Secure, explains it, "For consumers, federal employees and others alike, it always makes sense to compare multiple carriers and plan options."

That's because coverages, premiums and qualifying requirements can vary quite a bit between the two options. 

If you think you'll have a family member caring for you part of the time as you age, federal policies can also have a unique perk: they include respite care. This essentially gives your familial caregiver a break, paying for a temporary caregiver in their place.

"Federal long-term care insurance is worth exploring, especially if you expect some of your care to be administered by family members," Beauregard says. "The respite care benefit can help support your loved one as they take on caregiving." 

Learn more about your long-term care insurance options here today.

When private long-term care insurance is a better choice

Even if you're eligible for federal long-term care insurance, it's worth it to look at private long-term care insurance options, too. According to Beauregard, in the private market, there are typically more coverages to choose from.

"The coverage options are more limited" with federal insurance, he says. "There's a wider array of comparable coverage options, including short-term care plans, hybrid life insurance, and plans with accelerated benefits to guarantee payouts while still ensuring coverage for likely long-term care costs."

Private insurance could also be more affordable for some people. The federal long-term care insurance program is increasing premiums in January, which could make those plans much more expensive for existing policyholders.

"Given the greater flexibility of private insurance coverage, those who expect affordability to be a barrier may be better served by a private carrier," Beauregard says.

Start exploring your private long-term care insurance options here today.

Federal long-term care insurance on pause

Applications for federal long-term care insurance coverage are currently on pause, so for now, private long-term care insurance is your only option. When applications do open up again, though, it will be important to compare all your options, weighing the easier qualification offered by federal long-term care policies with the flexibility that comes with private ones. You should also compare premiums to make sure you're getting the best fit for your budget.

Editor's note: A previous version of this article incorrectly stated that medical underwriting is not required for federal long-term care insurance. It has since been updated.

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