As a retired Federal Employee (age 70), I am eligible for the FLTCIP as is my wife who is 61. It seems like a good plan, and I was about to sign up when I just learned that it does not have a partnership with Colorado, where we live. I am looking at a $150 DBA at 5% compound, 90 day wait for both of us and 2 years for me and 3 years for my wife. But the CO partnership also seems like a good idea. I have quotes for United and Mutual of Omaha which are for pooled home care with a cash benefit, at 5% for 20 years, and about the same premium amount as the Fed plan. I would like your advice on what is more important? A good Fed plan? State partnership? Is 20 years at 5% a good plan for my wife? How important is a cash benefit? Dave, Colorado

Hi Dave – I believe the Partnership is extremely important and would encourage you to go that route. The FLTCIP is a really good plan but doesn’t participate in the Partnership in any state, not just Colorado. I also believe a cash benefit is extremely important as who knows what care will look like in 20 years?  As for the 5% 20 years, it depends on longevity or Alzheimer’s in your family. You could do the 5% compound 3X for only $6.00 more a month. I would much rather see you do something with 5% compound vs. 3% compound for life because the 5% compound grows much faster so you are smart to be looking at that. 5% compound doubles your benefits in about 15 years whereas 3% takes 24 years. You both need inflation coverage, not just your wife though so be sure to get it on yourself. You can do 5% compound 2X and she can do 5% compound 3X. You have to take inflation coverage on yourself to have a Partnership plan because inflation is required for all applicants under age 76.

Annual premium at standard health is $3989 and about 15% less if you can qualify for the preferred health discount. If you need to convince yourself of the value, just multiply your premium by 20 years and compare the premium to the benefits you will have at that time. Your 2 year plan starts out at $108,000 + your wife’s 3 year plan starts out at $162,000 for a total of $270,000.  In 20 years, the $270,000 will have grown to $689,000!  So $3989 x 20 years is only $79,780 vs. $689,000 in benefits at that time.  Pretty great deal, isn’t it? Of course you are subject to class rate increases along the way but you can see the concept. There’s a huge difference between $80K and $689K. And don’t forget that the premium stops when one files a claim. You can make it stop on both of you when only one of you files a claim for an additional $80 a year in premium.  I am using the United of Omaha plan so you can go over this information with your agent.

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