Who Buys Reimbursement Long Term Care Insurance Policies?
It is not exactly the crowd favorite but a reimbursement long term care insurance (LTCI) policy offers so many advantages especially financially which is why people should consider looking at it, as the cost of long term care (LTC) is getting higher each year.
Reimbursement policies are among the oldest LTCI plans but these remain in demand given the fact that they are much cheaper than other types of LTCI. From the term itself, a reimbursement policy reimburses the policyholder the exact amount of his total expenses on care. It does not pay out the exact maximum daily benefit amount of the insured individual unless the total expenses that he incurs would total to his maximum daily benefit amount.
To illustrate clearly how a reimbursement policy works, here’s an example:
Mr. Garcia, 76 years old, stayed in a nursing home after he had an insulin attack and the total daily expenses that he incurred in the said facility amounted to $275. He has a reimbursement policy which stipulates a daily benefit of $275 payable to him in 36 months or three years. Before he can receive his insurance benefits Mr. Garcia has to submit to his insurer all of the receipts which have been issued to him by his care provider so that the insurance company can check his actual cost on care. Should the documents prove that Mr. Garcia, indeed, incurred $275 in LTC expenses he gets to reimburse his maximum daily benefit amount. But, if his actual expenses are lower the insurer will put the remainder of Mr. Garcia’s daily benefit amount back into the 75-year-old’s pool of benefits which he can look forward to utilizing later in his life.
Of course, it’s natural for any person to wonder what happens to the unused policy benefits in Mr. Garcia’s pool of money. As mentioned above, the policyholder can utilize it later in his life. Perhaps, a follow-up question like when is later? Once the policyholder has reached the end of his coverage period.
Extended Coverage from Reimbursement Long Term Care Insurance
By taking time to understand the nature of a reimbursement policy, everybody will eventually understand the beauty of this type of LTCI product.
It is easier to run short of benefits with other types of LTCI policies than with a reimbursement policy because the latter takes charge in managing the benefits of policyholders. Even if the maximum benefit period of the insured person is only three years, it is possible to extend this to four or even four and half if he owns a reimbursement policy.
According to LTCI experts, there is only a small percentage of LTCI policyholders that manage to use up their total daily benefit amount and this comprises of individuals that require a series of medical tests and therapy sessions. Meaning to say, it is possible for an insured person to extend his coverage through proper management of his policy benefits.
People should start seeing reimbursement long term care insurance policies from a different light so that they can get themselves some coverage and protect their family from financial threats that come with LTC costs.
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