There are different types Long Term Care Insurance Policies. “Indemnity” or “Expense Incurred” policies are most common. When you buy an expense incurred policy, you choose the benefit amount. Regardless of what you spend an “indemnity” or “per diem” policy pays up to a fixed benefit amount. An “indemnity” or “per diem” policy reimburses for the actual expenses for services received up to a fixed dollar amount per day, week, or month.
“Integrated Policies” or policies with “Pooled Benefits” pay a total dollar amount which may be used for different kinds of long term care services used. There is usually a daily, weekly, or monthly dollar limit for long term care expenses covered by this kind of policy. For example you buy a policy with a maximum benefit amount of $300,000 of pooled benefits. You will have, with this policy a maximum daily benefit of $300 that would last for 1,000 days if you spend the maximum daily amount on care. If your care costs less than the maximum daily amount of $300 you will receive benefits for more than 1,000 days.
Long Care Insurance Policies can be divided into three broad categories according to where benefits are paid - Home Care Only, Nursing Home and Residential Care Facility Only and Comprehensive. Care in your own home or a community setting is covered by Home Care Only policies. This kind of policy pays for expenses rising out of home health, adult day health care, hospice, respite care, personal care and homemaker services.
Costs rising out of care in a nursing home or any place that provides assisted living care as long as this place is licensed as a Residential Care Facility for the Elderly (RCFE) is covered by Nursing Home and Residential Care Facility Only policies. This policy pays for more than just room and board in these facilities. The costs of all long term care services you receive in either of these facilities is paid by this policy up to the policy’s maximum daily benefit amount.
Small neighborhood homes also called board and care facilities, retirement homes and specialized community facilities providing care for patients with cognitive impairment (dementia) from Alzheimer are some of the RCFE. The assisted living benefits must equal to at least 70% of the nursing home care benefit with this kind of policy.
The Comprehensive Long Term Care Insurance Policies cover costs rising out of care in a nursing home, assisted living facility, home care and community care (adult day care). LTC Comprehensive policies sold by different companies require different criteria to be met before benefits can be paid. When you are unable to perform two activities of daily living (such as bathing, using the bathroom, dressing eating etc.) or you have a cognitive condition that requires supervision, Comprehensive Long Term Care Insurance Policy will pay you the benefits. Whether care is provided in a nursing home, at your own home or in an assisted living facility the criteria required for the benefits remains as described above.
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