Cash Indemnity vs Daily Benefit

There are 2 ways long term care (LTC) insurance pays benefits.

• Reimbursement - client is reimbursed for expenses paid out for services.
• Indemnity - client receives the dollar amount of daily or monthly benefit without regard to actual expenses paid out for services.

With an "indemnity" policy, the claimant still must submit proof that he/she received care that qualified under the policy. The only difference between an "indemnity" policy and a "reimbursement" policy is that an "indemnity" policy will pay the full daily benefit for each day of qualified care, regardless of the actual cost of care.

The advantage to a "cash indemnity" policy is that the claimant will not have to submit paperwork or get out their checkbook each month. 

The primary advantage to a "cash indemnity" policy is that the client can allow their family members (or other individuals) to receive payment to provide care.

The only disadvantage to a "cash indemnity" policy is that in most cases (not all, but most) it is priced about 60% to 100% more than a reimbursement policy.

 

To learn more call 866.452.3670 or email PIPAC LIFE Brokerage at sales@pipaclife.com.