Most policies bay benefits on a daily, weekly or monthly basis. When you purchase a policy, you select a benefit amount for nursing home coverage. For example, you could select a benefit about from $50 to $350 per day for care in a nursing facility. The benefit amount payable for home or community care is generally based on a percentage of the benefit payable for care in a nursing facility. For example, if you select a daily benefit of $200 for care in a nursing facility your benefits for home or community care may be 50%, 75% or 100% of that amount, depending upon the policy and the options you select. It is very important that you understand and consider the cost of care in you community in selecting benefit amounts for long term care insurance.
Most policies limit the amount of coverage that is payable over the life of the policy. This limit is often expressed in terms of a maximum benefit period, like 3 or 5 years. For example, if you selected a daily benefit amount of $200 and a maximum benefit period of 3 years, then the maximum benefit payable under the policy, before considering elimination periods and certain other adjustments and limitations, would be $219,000 ($200 x 365 days x 3 years).
Elimination periods work like deductibles. Your benefits will generally not start on the first day that you receive care in a nursing facility or at home or in the community. Rather, your benefits start a specified number of days after you start receiving care. Some policies allow you to select a 0 day elimination period, but most offer elimination periods of 20, 30, 60, 90 or 120 days. The longer the elimination period, the lower your premium, but the more out of pocket expenses you will incur before your policy benefits start.
