A true group plan is a voluntary, guaranteed-issue, group insurance plan that provides long-term care benefits to full-time employees of a company. This means that it accepts all employees regardless of their physical condition. These plans are very attractive to employees not only because of the leniency in underwriting but also because of the relatively low premiums. Furthermore, employees who are in good health or married pay discounted premiums.
True group plans can be converted to identical individual plans when the employee leaves the company. These plans, however, are no longer actively used because of concerns regarding adverse selection, a situation in which applicants who are least desirable for insurance due to their poor health are the ones most attracted to participate. This may put the insurance company at risk of heavy financial exposure in the future. In its place, insurance companies issue multi-life, long-term care insurance.
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