Do You Need a Reimbursement Policy?
Reimbursement long term care insurance (LTCI) policies are considerably cheap compared to other types of policies. This is the reason most buyers go for this type of product even though it’s not what they really want.
Now LTCI experts say that it’s okay for an individual not to want a reimbursement policy but buys it anyway because he needs it. There is a disadvantage, however, if he buys the product just because it’s priced lower than an indemnity policy or a cash plan or whatnot without giving his future health care needs much thought.
Consumers have to study the array of products in the LTCI market because the no-return-no-exchange policy is strictly imposed here. If a buyer signs a specific type of policy without reading it in its entirety he cannot file a complaint once he realizes later in the future that he can’t have what he thought he could get out of his policy.
So if you decide to buy a reimbursement policy it should be out of your need for what it clearly offers. If the offerings of this insurance product are not very clear to you, it is your responsibility to find out what these are.
You can contact a licensed LTCI representative and ask how a reimbursement policy operates or go directly to an LTCI carrier if you wish. But you cannot expect these professionals to spoonfeed you like remind you to read every word written on your policy especially the fine print because common sense should dictate this.
An Overview of Reimbursement Long Term Care Insurance
Anyone with a reimbursement LTCI policy will be able to reimburse the exact or total amount of his expenses on long term care in a qualified LTCI facility.
Notice that “qualified LTCI facility” was emphasized in the earlier paragraph because reimbursement policies are actually designed for facility care. Before an individual with this type of policy can receive his insurance benefits, he has to submit to his insurer official receipts that indicate his actual LTC costs. He shall be reimbursed up to his policy’s maximum daily benefit amount but if the total amount of his LTC expenses exceeds the amount of his benefits, he has to pay the excess amount using his own money.
For example, you own a reimbursement policy with a maximum daily benefit amount of $230 for a maximum benefit period of three years. After 30 years of premium payment an event qualifies you for LTC so you start to claim your benefits. Your daily nursing home expenses never exceed $220 so this is the amount that your insurer reimburses you while the remainder of your daily benefit, which is $10, he puts back in your pool of benefits.
By the time you reach the end of your coverage period, you will still have $10,800 unused benefits owing to the $10 which your insurer puts away every time you receive care in a nursing home.
Reimbursement long term care insurance policies are not simply cheap, these products are cost-effective. There is a fine line between cheap and cost-effective. The former just refers to the price of a product paying no attention to its quality. Meanwhile, the latter means spending less on something of great value.
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