Reimburse Long Term Care Costs or Pay It?
Good thing Granny Hon and Granny Mon chose the former, which is to reimburse, as long term care costs are expected to soar. That is why they have a joint reimbursement long term care insurance policy which they purchased when they were still in the line of 40s.
Granny Hon or Grandma Honey and Granny Mon or Granddad Simon, are my grandparents aged 74 and 78, respectively. They used to be corporate professionals when they were younger and during their heyday they have managed to establish a sizeable nest egg.
They decided to split their assets and invest half of it in a modest pastry shop and the other half in long term care insurance (LTCI). Prudent by nature, they went for the reimbursement LTCI policy because they like the idea of having a third party involved in the management of their policy benefits.
According to Granny Hon and Granny Mon, if the money is in your hands expect more danger. They say nobody on earth is disciplined enough to handle money wisely, especially if it’s as big as $400,000. I believe them, of course, as they have managed to get to this phase in their life without accumulating debt.
Not once have my grandparents owed money to other people because they have always lived within their means. Even if there was hardly anything on the table, they wouldn’t call out for help. They shared with me that there was a time in their life that they had to eat potatoes and mustard for two consecutive weeks. The good cook she is, Granny Hon just reinvented the dish every single night just so they can have a different dinner.
Thriftiness led them to where they are now, they say. Although neither has started to show symptoms of a serious illness, my grandparents have already started canvassing rates for an aging-in-place project. This is the improvement of a senior citizen’s home and integration of devices that will allow them to continue living independently and comfortably.
Focus of Reimbursement Long Term Care Insurance
Although they have an LTCI policy to cover their long term care needs should they need it someday, Granny Hon and Granny Mon said their policy will not pay the exact amount of their maximum benefit, rather it will only reimburse the total amount of expenses that they could possibly incur from institutional or community-based LTC facilities.
According to them they have to go through a lot of paperwork before they can reimburse their expenses so if they wait for a benefit trigger to occur before they begin home renovation, their project might never be completed.
What’s more, they want their insurance to focus on their healthcare needs and nothing else because they don’t intend to fork out additional money for medicine, therapies and transportation fare to and from their doctor once they qualify for LTC.
They prefer to pay out-of-pocket now for their other needs while their bodies are still capable of functioning rather than when they are physically weak and mentally impaired. When they get to that point, their reimbursement long term care insurance shall step in.
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