Indemnity Vs. Reimbursement Long-Term Care Insurance Policies

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Healthcare is a significant consideration for everyone, especially as we age. That’s why understanding the difference between Indemnity Vs. Reimbursement Long-Term Care Insurance Policies is of paramount importance. Today, we will delve into two commonly misunderstood concepts in this field: indemnity and reimbursement insurance policies. By the end of this guide, you’ll have a much clearer understanding of these terms, their differences, and how they relate to comprehensive and non-comprehensive long-term care.

Indemnity Vs. Reimbursement Long-Term Care Insurance Policies

Indemnity Long-term Care Insurance Policies

Unlike social security, an indemnity policy pays a fixed daily benefit, regardless of your out-of-pocket expenses. The insurance will only cover the predetermined sum if the costs exceed the daily benefit amount. This policy gives the insured more flexibility in managing their care costs.

Example: Your indemnity policy provides a daily benefit of $100. If your care for the day costs $80, you can use the remaining $20 as you wish. However, if your care costs $120, you’d be responsible for covering the $20 difference.

Reimbursement Long-term Care Insurance Policies

Unlike indemnity policies, reimbursement policies cover the actual cost of care up to a maximum daily or monthly limit. The insured must submit receipts and bills to the insurance company for reimbursement.

Example: If your care costs $120 for a day, and your reimbursement policy covers up to $150 daily, the insurance company would reimburse the total of $120. However, if your costs for the day were $160, you’d be responsible for the $10 difference.

Indemnity Vs. Reimbursement Long-Term Care Insurance Policies

Comprehensive Long-Term Care Insurance

Comprehensive long-term care insurance is an all-encompassing policy covering many services, including skilled nursing, rehabilitation, personal care, and sometimes even homemaker services. This type of insurance provides a safety net across various care scenarios.

Example: Suppose your comprehensive policy covers home health care, assisted living, and nursing home care. In this case, your policy will provide coverage if you need a home health aide for a few weeks after a hospital stay or require long-term residency in a nursing home.

Indemnity Vs Reimbursement

Non-Comprehensive Long-Term Care Insurance

In contrast, non-comprehensive policies cover specific types of long-term care. For example, these policies might cover only nursing home care or only home health care, but not both. As such, these policies might be more affordable but offer less flexibility.

Example: Suppose you purchased a non-comprehensive policy covering only nursing home care. If you require home health care or assisted living, your policy would not cover these services, and you would bear the total cost.

Indemnity Vs. Reimbursement Long-Term Care Policies

Next Steps

Understanding the difference between indemnity and reimbursement long-term care insurance policies is essential in making an informed decision about your healthcare future. Weighing these options in line with your health, finances, and personal preferences will guide you to the most appropriate choice. Remember, the goal is to ensure you’re well taken care of in the long run. Stay informed and make the choices that best serve your future health and happiness.

Indemnity Vs. Reimbursement Ltc

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Frequently Asked Questions

What is the difference between an indemnity and reimbursement long-term care insurance policy?

An indemnity long-term care insurance policy pays a fixed amount per day, while a reimbursement policy pays for expenses incurred up to a daily or lifetime limit.

What factors should you consider when choosing between an indemnity and reimbursement policy?

When choosing between an indemnity and reimbursement long-term care insurance policy, factors include budget, health status, and personal preferences for how benefits are received and managed.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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