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LONG
TERM CARE - POLICY DETAILS CONT.
Long term care policies
are either Reimbursement or Indemnity.
Reimbursement,
which is the most common, pay the bill. For example: If your policy
has a $200 daily benefit and your bill is $100, it will pay $100.
The advantage is that the remaining $100 will stay in the "pot"
and possibly extend your benefit period.
Indemnity policies
pay the benefit. If your policy has a $200 per day benefit and your
bill is $100, it will pay you $200. The remaining $100 goes to you
and you can do what you wish with the extra money. The advantage
of this policy is that you get to keep what is left, not the insurance
company. However, the disadvantage is that indemnity policies tend
to be more expensive and being that the money does not stay in the
"pot", your benefit period will not be extended.
 When
purchasing a policy, be certain that the company is financially
stable. If a company insuring you for long term care is not
financially sound, your premiums could increase rapidly through
the years.
It is also wise to be
insured with a carrier that has "strict" underwriting
guidelines. The reason behind this advice is that insurers with
easy underwriting will insure at risk individuals. This can cause
a huge financial burden in the future which will increase rates.
Therefore, lower premiums should present caution unless the financial
strength of the company is strong.
You can find the financial
strengths at the following rating companies:
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