Reimbursement Policy Or A Disability Model Indemnity Plan?

By Author: Chelsea Andrews
Total Articles: 25
Comment this article

Insurance companies offer different long term care (LTC) products to people who want to be certain that by the time they get too old and weak to function normally, they don’t have to spend all of their savings and retirement money just to receive quality care. Among these companies’ offerings, the Disability Model Indemnity Plan gets the most attention but it is unfortunately the most expensive.

There are actually two major types of long term care insurance (LTCI) policies sold in the market. One of them is the reimbursement LTCI policy which pays the insured individual the exact amount of his expenses on care.

For example, the insured’s reimbursement policy stipulates a maximum daily benefit amount of $230 but his actual expenses on care only totaled $190 so he will only receive the latter amount from his insurance. Meanwhile, the remaining $40 shall be returned to his pool of benefits which he can use in the future.

Prior to reimbursing the insured individual his total expenses on care, a reimbursement LTCI policy will require him first to submit to his insurer receipts issued to him by ...
... the LTC facility from which he acquired care.

Now the second type of LTCI policy is known as the indemnity plan which pays out to the insured his exact daily benefit amount regardless of the actual amount of his expenses on care. Under the indemnity plan there’s the Disability Model Indemnity Plan, which is also known as CASH policy, that pays out one’s complete daily benefit amount even though if he did not acquire care from a licensed caregiver or nurse.

With a CASH policy, you can receive care from family members and pay them using your benefits. You also have the freedom to remodel your home or modify it to make it suitable for that aging in place experience. Have it installed with additional safety handrails, security shower grips, wheelchair ramps and lifts, medical equipment, and the necessary communication devices if you wish. All of these are possible because the insurance company that issued your policy is completely hands-off from your benefits.

Aside from granting you absolute freedom to spend your benefits however and wherever you want, a CASH policy will also spare you from fussing over a lot of paperwork because it does not require official receipts prior to paying out your benefits.

Before you can qualify for the benefits of your CASH policy, though, you have to require assistance with at least two activities of daily living (ADL) which can be anything from eating, bathing, dressing, to toilet usage, managing continence, or transferring.

It is important to note that the CASH policy will cost more than a reimbursement policy so it entails a lot of thought. Before deciding to purchase this type of LTCI product assess your health and your finances first. Are you predisposed to acquiring a life-threatening illness? Will you still be able to buy your basic necessities if you purchase this type of LTCI policy?

Although a Disability Model Indemnity Plan is ideal especially in a country where everybody is threatened by the cost of care, there are certain factors that you have to ponder on. Discuss it with your family and once you’ve come up with a decision, contact a licensed LTCI representative to help you gather quotes.

Completelongtermcare.com provides helpful information regarding CLASS act and as well as free long term care quote that come from major carriers.