Long Term Care Insurance Benefit Amount
When looking at an Long Term Care insurance policy, the first and most important decision to make is the daily benefit amount. In other words, how much you would like your policy to pay out to you in benefits at the time of claim. The choices range from about $50 a day to $500 a day. Some policies even offer unlimited amounts. It is imperative to know what the average cost for care is in the area you plan on living at the time of claim. You can find that information on our Long Term Care Costs by State section.
Benefit Amount Examples
In Florida, for example, the latest statistics show the average cost for care in the $190 a day range. But if you plan on moving to New York City when you need the care, because that is where your kids are, plan on buying a $380 a day benefit.
Many of the newer policies in the marketplace to-day offer a monthly pay benefit as opposed to a daily. Sometimes, a bit of a higher cost is involved. The difference here is that instead of being capped for example at $200 a day, you have access to $6000 a month if you need it. You see, since home care is so sporadic, you may need $300 worth of services on one day and only $50 the next. In this scenario, you would have much more flexibility with a monthly pay plan.
How the Benefit Amount Related to the Cost of your Policy
Your long term care insurance premium will be directly related to benefit amount you choose. For example, a plan that pays up to $200 per day will be twice as much that only pays up to $100 per day. For this reason, many people will choose to co-insure their LTC costs i.e. they will choose a benefit amount lower than the average cost of care in their area.