Which Policy Works Best?
Private insurance companies offer different types of long term care policies to be able to accommodate everybody’s healthcare needs and budget.
Indemnity long term care insurance (LTCI) is the choice of most buyers but because of its high cost most people have opted for another type of LTCI policy which is called reimbursement.
An indemnity LTCI policy would pay up to your fixed maximum daily, weekly or monthly benefit regardless of the actual total expenses that you have incurred in a nursing home, in a community-based long term care(LTC) facility or at home.
For example, your LTCI policy stipulates a maximum benefit amount of $250,000 for a three-year period and a daily benefit of $250 for 1,000 days. If you spend $152 per day for a home health aide who performs eight hours of work which covers assistance in the activities of daily living, such as eating, bathing, toileting, dressing, continence, and transferring, your indemnity policy will still pay you $250 a day.
On the other hand, if your daily LTC expenses exceed your maximum daily benefit amount, which in this case is $250, you have to pay for the remainder. So if you have spent a total of $275 in a day for a home health aide, your insurer will only pay $250 and you will have to foot the remaining $25.
Looking at Other Types of Long Term Care Policies
Meanwhile, a reimbursement LTCI policy pays the total amount of your actual expenses up to your maximum daily, weekly or monthly benefit. But before you can reimburse your expenses on medical or personal care services you have to present an official receipt whether of a nursing home or a hospital to your insurer.
Upon submission of the receipts or bills, your insurer will assess your expenses and then reimburse you the exact amount of your total expenses in a hospital, an institutional or a community-based LTC facility. For instance, the total amount of your daily expenses in a nursing home is $225 so this is the amount that you will receive from your policy even if the amount of your maximum daily benefit is $250. The remaining $25 of your daily benefit shall be returned to your pool of benefits which you can use later on.
Now if the total amount of your daily expenses exceeds your policy’s maximum daily benefit you will have to pay the excess amount. For example, a day’s stay in a hospital cost you $265 but since your policy stipulates a maximum daily benefit of $250, this is only the amount that you will be receiving from your insurance while you have to pay the remaining $15 using your resources.
Study these types of long term care policies very well as you plan your future healthcare. Though it would be really nice to be in full control of your money which is what an indemnity policy offers, think about the long term security which you can get from a reimbursement policy.
Getting long term care insurance quotes early is highly recommended to people who wants to live a comfortable life once they retire from their jobs. The people behind CompleteLongTermCare.com acknowldeges that and that’s why we are giving you the chance to shop for long term care quotes from all major carriers.
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