Long-term care insurance plans come in a few different types, each with their own distinct advantages. A brief overview can be found below, but please contact us if you have any additional questions or would like to discuss your options in greater depth.
Reimbursement LTC Insurance
This type of plan pays for the day-by-day cost of long-term care, up to a certain daily amount and an overall maximum outlined by the plan. For example, say your total plan is worth $50,000 but only pays out up to $150 daily benefit. If your LTC costs $200 daily, you will need to cover the additional $50 per day yourself.
However, if your daily cost is less than the daily benefit amount, that extra allowance will go back into the overall policy worth. So if your $50,000 plan pays $150 per day but your daily care only costs $120, then the extra $30 per day will be added back to the $50,000 total. This means that even if the plan was set to last a certain number of years, you may be able to stretch it farther depending on your regular cost of care.
Indemnity LTC Insurance
This type of plan pays a lump sum every day or month regardless of the overall cost of the care you are receiving. So if your indemnity plan pays out $150 per day but your daily care only costs $90, you would be able to set the remaining $60 per day aside in a bank account.
With this type of plan, you can actually have the potential to receive much more money than you spend on a daily basis. However, indemnity plans will not pay for family members to provide care.
Cash Benefit LTC Insurance
Similar to indemnity policies, this type of plan pays a set amount regardless of your actual expenses. The difference lies in that cash benefit policies will pay even if the person providing care is a family member. This makes them a great choice for people who are receiving long-term care at home from a spouse, child, or other relative.