Benefits of an Affordable Long Term Care Insurance Policy

Most long term care insurance companies offer two basic types of policies and these are reimbursement long term care insurance (LTCI) policies and indemnity policies which have two kinds namely full indemnity policy and partial indemnity policy.

Between the two types of LTCI policies, the most common is the reimbursement policy because it is more affordable compared to an indemnity policy which will increase your annual premium. With a reimbursement policy the insured individual is able to reimburse his out-of-pocket expenses on long term care (LTC) up to his policy’s maximum daily benefit amount. If the total amount of his expenses would exceed the amount of his daily benefit, he will have to pay the excess amount using his personal resources because his policy will no longer cover this.

Assuming a reimbursement LTCI policy has a maximum daily benefit amount of $230 for a maximum benefit period of three years, so that makes the policy’s total coverage amount $251,850. Let’s say the policyholder acquired care in a nursing home and her total expenses totaled to $200, so her policy will reimburse her $200 and it shall put back $30 in her pool of benefits.

In case the policyholder’s total daily expenses in the nursing home turned out to be $250, she will receive $230 from her policy and she’s required to pay the remaining $20 out-of-pocket.

Some insurance companies would reimburse insured individuals with reimbursement policies for their LTC expenses, but there are others that pay directly the insured’s care provider. Before the insurer releases benefits under a reimbursement LTCI policy, it would require the insured to submit official receipts issued to him by his care provider for documentation purposes.

Expand Your Coverage with a Reimbursement Long Term Care Insurance Policy

Practically everybody likes to own an indemnity LTCI policy or the cash model because this type of LTCI policy would pay the full benefit amount of a policyholder regardless of his actual expenses on care. In addition, those who own this type of policy are not required to collect receipts from their care providers and thus are free to receive care even in the comforts of their homes.

Unfortunately, being completely in control of your insurance benefits has its downside. If you are not a wise spender, you could end up exhausting your benefits before you have even reached the end of your benefit period. Once this happens, you cannot point a finger at your insurer because you were solely in charge of your policy’s benefits.

With a reimbursement LTCI policy it’s like having a personal bookkeeper who keeps track of your LTC expenses. It’s not all the time that the total amount of your LTC expenses sums up to the limit of your policy’s maximum daily benefit so your insurer manages to throw a certain amount of money back into your pool of benefits from time to time.

Once you’ve reached the end of your benefit period, the total amount of benefits that your insurer has set aside in your reimbursement long term care insurance policy’ pool of benefits will allow you to receive additional coverage.

To get more information about reimbursement policies, contact an insurance agent in your area who is authorized to sell LTCI policies.