Most LTC policies set benefit limits, in terms of how long the benefits are paid or how much the dollar benefit will be for any one covered care service or a combination of services. The benefit period determines the length of time you will receive benefits from your policy. For most policies, the benefit period spans from two to six years. More expensive policies are also available that will cover you for your entire life.
During this period, you must pay all of your long-term care expenses out of your own pocket (just like a deductible). The elimination periods for long-term care can range from 0 to 365 days. Most insurers will give the insured the option of selecting the waiting period that works best for them; however, the most common selected elimination period is 90 days. Shorter elimination periods will have higher premium payments than longer waiting periods.
The daily or monthly benefit is the amount of money the insurance company will pay for each day or month you are covered by a long-term care policy. If the cost of care is more than your daily or monthly benefit, you will need to pay the balance out of your own pocket.The daily/monthly benefit amount is initially determined on an individual basis by the policy owner and the insurance company. The agreed amount will be listed in your long-term care insurance contract along with the benefit period. Insurance premiums will be higher for larger daily benefits and cost less if daily benefits are less. The typical daily benefits range from $150 to $250 per day. Applicants are encouraged to research long-term care costs in their geographical region of care, as costs can vary significantly depending on location.
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