What is indemnity long term care insurance? While LTC becomes a popular insurance option, it is still quite undeniable that a large percentage of Americans still don't have enough information about it. New buyers even existing policy holders experience confusion in understanding the existing various types of policies. Answer sites and health or insurance forums are also bombarded with questions on this, that is why we will try to answer that here and we will determine if it is right for you.
Defining Indemnity LTC
An indemnity policy is a type of insurance plan wherein the insured is paid the full daily benefit amount contingent. The advantage here lies in the fact that the insured can reclaim the benefits covered by his policy. If compared to other types of LTC plans, it is quite the same as the others in a way that it also requires qualifications or eligibility to receive benefits. But an additional pro is that this LTC plan allows the policy holder to have control of the money for his maximum allowable daily benefit amount. One can choose to use it on incurred expenses or save it up and there's no need to file a claim or submit receipts.
More Great Things About Indemnity LTC
While this is more expensive than a reimbursement policy, the advantages you can get from it are better than the latter. With it, a fixed daily, weekly, or monthly amount can be received by the insured not considering how much is the cost of your bill. An example would be, if your policy pays $400 a day but your in-home caregiver only costs $300, you can still get the maximum allowable daily benefit amount which is $400.
After comparing indemnity long term care insurance to reimbursement policy, it is time to differentiate indemnity from expense incurred. It is given that both terms point out the means policies handle the total amount of LTCI benefits. As mentioned earlier, indemnity pays a fixed amount while expense incurred will only reimburse a particular amount as discussed and decided during the acquisition of the policy.
Is It Right For You? Most agents and carriers will suggest this type of policy for those receiving care at home provided by family and friends. It is simpler as compared to others as there will be no need to track medical bills and approved caregivers.
However, it is also important to take note of its flaws. First, it is quite more expensive at offset. Second, is that it will not pay for more than the max benefit amount stated in the policy. If your limit is $5,000 and you went over it, you have to pay for the additional costs from out of your pocket.
You can seek the expertise and advice of agents, from your preferred insurance carriers, a financial planner or a lawyer, if an indemnity long term care insurance will work for you and provide your required coverage.
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