Long-Term Care Indemnity vs. Reimbursement Plans

Long-Term Care Indemnity vs. Reimbursement Plans ...

There are two distinct types of long-term care plans that determine how the client will be paid. These are indemnity-style plans and reimbursement-style plans. It's quite possible to make a decision between these two strategies without knowing what you're going to make.

C. Brant Steck, a risk management consultant at First Element Insurance Planners and vice president at BUI, explains this by giving an example: If the maximum monthly benefit is $5,000 per month and the benefit period is 36 months, the client will receive a check each and every month in the amount of $5,000.

There are no invoices, receipts, or waiting for caregivers to be approved with this program. One drawback is that indemnity plans generally cost substantially more than reimbursement plans, so the client must decide if the benefits are worth the additional expense.

Follow us on Instagram and Twitter!

A reimbursement program is a program that reimburses the policy owner for qualified expenses up to a monthly maximum. However, the policy owner must produce receipts to the insurance company. In the same $5,000 a month example, the insurance company will reimburse that client $3,000. Steck explains that the remaining $2,000 that is not given to the client stays in their holding account for future use.

You may also like...

Have you considered long-term disability insurance? Rob Ziliak, a financial planner, explains why you should.

When may a person be eligible for a long-term care insurance policy?

The WA Cares Fund is experiencing a fresh slew of changes to Washington State's long-term care program.

You may also like: