How does long term care insurance provide benefits?

Policies pay for qualified long term care cost based on the contract.  The basis can be cost-Incurred Benefit/Reimbursement Plan or Indemnity Benefit or Cash Benefit

A cost incurred benefit reimburses actual expenses up to the stated daily or monthly benefit amount.

An indemnity benefit pays the insured a stated daily benefit each day an approved long term care service is received. 

A cash plan pays the monthly benefit at the beginning of the month or end of month based on contractural language in which the insured qualifies for benefits.

Access to Policy Benefits (Benefit Triggers)

Tax Qualified Policies require certification by your licensed health care practitioner that you are chronically ill, meaning that substantial (either hands-on or stand-by) care is needed and is expected to last for at least 90 days.  There are two ways to qualify for benefits:

Activities of Daily Living (ADL) — you require help with at least 2 activities of daily living, such as eating, bathing, dressing, transferring, toileting or continence.

Cognitive Impairment—you are certified by your licensed health care practitioner as needing assistance to protect yourself from threats of health or safety.  You may be able to physically perform the activities of daily living but need to be reminded to do so.