Getting More Coverage from Reimbursement Long Term Care Insurance
More people prefer an indemnity long term care insurance policy to a reimbursement long term care insurance policy because they find the latter teeming with so many restrictions. Unfortunately, an indemnity plan is more expensive so they clinch a reimbursement policy instead, oftentimes with a heavy heart.
Before explaining how policies under the reimbursement long term care insurance (LTCI) work, here’s explaining how indemnity LTCI plans pay out benefits. Regardless of your actual expenses on long term care (LTC), an indemnity policy will pay out your exact maximum daily or monthly benefit amount as stipulated in your policy.
That is exactly what most people like about indemnity LTCI policies. They want to be in full control of their benefits which is, indeed, a good thing but only if they know how to manage their benefits properly.
Unfortunately, some individuals who purchased indemnity policies have already outlived their benefits because they did not allocate it properly nor did they consider spending it wisely. It is important to keep in mind your goal in purchasing an LTCI policy which is to gain access to quality care and to protect your assets which didn’t take you just overnight to acquire.
Reimbursement Long Term Care Insurance
Reimbursement LTCI policies pay out benefits in a totally different way. Individuals with this type of policy would be reimbursed for their total expenses on care up to their maximum daily benefit amount. If one’s total LTC expenses would exceed his policy’s daily benefit amount he has to settle the excess amount using his personal resources because this will not be covered by his policy.
To receive benefits from a reimbursement policy, the insured individual has to first submit to his insurer an official receipt which was issued to him by the LTC facility in which he acquired care. The receipt should itemize his LTC expenses so that his insurer will know how much to reimburse him. If the insured fails to present a receipt or any document proving that he acquired care, he shall not be reimbursed for his expenses.
For instance, your reimbursement policy stipulates a maximum daily benefit amount of $200 but the expenses that you’ve incurred in a nursing home only totaled to $180 so you will only receive $180 from your insurer. Meanwhile, the remainder which is $20 shall be returned to your pool of benefits.
It is very important to understand what happens to the remainder of your daily benefit that is returned to your pool of benefits just so you won’t think that you are being short-changed by your insurance company.
The aggregate amount of your unused benefits shall be the reason of your extended coverage later on. For example, your policy stipulates a maximum daily benefit amount of $200 for a benefit period of three years. In those three years, your insurer has managed to regularly put away $20 in your pool of benefits as your total daily expenses in a nursing home would always just amount to $180.
By the time you reach the end of your three-year coverage, you would still have a total of $21,900 in benefits from your reimbursement long term care insurance policy. Simply put, instead of just three years of coverage you got more from your policy
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