How Long-Term Care Insurance Policies Pay Benefits

IMPORTANCE RATING: 4

Long-term care insurance policies have 3 basic methods of paying benefits:

1. Reimbursement Method:

You pay the care provider, then submit a copy of the receipt to the long-term care insurance company for reimbursement.

The amount reimbursed to you will be either the actual amount you paid for services, or your in-force benefit amount, whichever is less.

This method is the least expensive in premium cost.

2. Indemnity Method:

The benefit paid to you is the exact amount of your in-force benefit amount, even if your long-term care expenses are less than your benefit amount.

This payment method is more expensive than the reimbursement method above.

3. Cash Method

With this method, you are not even required to incur expenses to receive benefits on a claim. You can collect your full benefit amount, even if someone cares for you free of charge.

This method is the most expensive in terms of premium than the other two.

RECOMMENDATION: The reimbursement method is your best value because it does the most effective job of solving the true long-term care problem, per premium dollar paid.