Long-Term Care Insurance:                                             How Long Will Your Policy Pay Benefits?

The maximum lifetime benefit is the factor that determines the maximum amount of money your long-term care insurance policy will pay in dollars once you have a claim and begin to receive benefits.

The concept is similar to an accumulated savings account from which you can withdraw money. Once your maximum lifetime benefit is reached, the policy will pay no further benefits.

You can choose a maximum lifetime benefit of as little as one year of long-term care expenses or one with no limit, as well as benefit periods in between these 2 extremes. The no limit choice is also known as the unlimited benefit maximum or a lifetime benefit period . It allows you to continue collecting benefits for a long as you need care, even if the care is needed for several decades.

Deciding which benefit period to choose is one of the most difficult choices to make in designing an LTC insurance policy. If your family has a history of longevity, dementia, or neurological conditions, you would want to consider a longer benefit period.

RECOMMENDATION: If you are fortunate enough to be investigating LTC insurance at a fairly young age (under age 65), the difference in premium between the unlimited benefit maximum and a limited benefit maximum is fairly negligible. In this case, the unlimited benefit maximum is your best value if the premium is affordable.

If affordability is an issue, consider coverage with a limit that would cover you for 5 to 10 years of care. Recent statistics indicate that the majority of people do not need long-term care for more than 10 years. But never choose a benefit period that pays for less than 5 years of care.