Most policies are reimbursement of qualified expenses from licensed providers of home care, assisted living facilities and nursing homes. You submit claim forms, along with expenses and are reimbursed for your care costs.
There are policies available that provide cash long-term care coverage. These policies pay you a cash benefit when you are certified as chronically ill. There is no need to submit bills or claim forms. You pay whomever you wish to care for you. These policies are more expensive than reimbursement LTC insurance policies
How much is paid from your policy depends on the type of plan you purchased, along with your benefit amount.
The maximum benefit of a tax qualified long-term care reimbursement insurance policy is usually described as a “pool of money”. This is determined by how much daily or monthly benefit is purchased multiplied by the benefit period. For example, if you bought $4,500 per month on a 4 year plan, the insurance company may multiply $4,500 x 48 months and your initial pool of money would be $216,000.00. They would initially pay for care up to $4,500 per month until the $216,000 is exhausted, even if it lasted longer than 48 months.
The cash plans pay the stated daily or monthly benefit regardless of the cost of care. They pay a stated benefit for a stated period of time.Your Plan May have included Inflation:
Inflation Protection – riders that allow your insurance protection to grow over time and maintain its integrity until you need it.
Types of inflation:
5. How long are benefits paid?
Each policy will have a stated maximum benefit or time period on the face page.