Long-term care insurance benefits cover the cost of care up to a monthly maximum amount. The maximum is either the daily cost of care or the monthly cost of care. The difference impacts the insured’s out of pocket expenses.
Case in point:
| Cost of Care | Daily Benefit Policy | Monthly Benefit Policy | ||
| Benefit paid | Out-of-pocket | Benefit paid | Out-of-pocket | |
| $150 for home care for 15 days ($2,250) |
$150 x 15 days = $2,250 |
$0 | $150 x 15 days = $2,250 |
$0 |
| $225 for home care for 10 days ($2,250) |
$150 x 10 days = $1,500 |
$750 | $225 x 10 days = $2,250 |
$0 |
| Total benefits paid during 30-day period |
$3,750 | $750 | $4,500 | $0 |
Although the total monthly amount of coverage is equivalent for both policies, the Daily Benefit policyholder will pay more out-of-pocket than the Monthly Benefit policyholder.
Cost of benefit:
There is no impact to the base plan premium for those carriers that offer only Monthly Benefit.