How Long Does Long Term Care Insurance Pay?

by | Oct 29, 2015

Recently there have been numerous mistakes in the media regarding how long does long term care insurance pay?  Many of the reports have stated that long term care insurance policies pay benefits for a year or two. Some reports have said that long term care policies will pay benefits for “no more than 3 years”. These statements are completely false.

When you buy your long term care policy you choose how long you want your long term care insurance to pay benefits.

Today, long term care insurance policies are a lot like the cereal aisle at the grocery store.  In other words, there are lots of choices.  That’s good.  Everyone likes to have choices.  

Over the past few years, leading long term care insurance companies have developed new policies.  You get to choose how long you want your long term care insurance policy to pay benefits.  

How long your long term care insurance policy pays benefits depends upon the “Benefit Period” you choose.

The “benefit period” is one of the most important choices you make when you purchase long term care insurance.  The “benefit period” is usually described in terms of years.  The “benefit period” is the shortest amount of time that your policy would be able to pay benefits before running out of benefits.  With today’s policies you can choose a benefit period of:

2 years, 3 years, 4 years, 5 years, 6 years, 8 years, 10 years, or lifetime/unlimited.

Not every company offers all of these choices for your “Benefit Period”.  Make sure you work with an independent insurance agent who specializes in long term care insurance who represents a lot of different long term care insurance companies.


Your long term care insurance can pay longer than the “benefit period”.

A policy with a 5 year benefit period means that the soonest the policy could “run out of benefits” is after you’ve received benefits for 5 years.  However, it can last longer than that.  Most policies will pay benefits until your “lifetime maximum” has been reached.  

The “lifetime maximum” is a dollar amount that is equal to your
Monthly Benefit times 12 times the number of years you choose for your Benefit Period.  

For example, if you choose a Monthly Benefit of $7,000 and your Benefit Period is 5 years, your “lifetime maximum” would be $420,000.  ($7,000 x 12 x 5 = $420,000)  

In this example, if your care cost $5,000 per month your policy would pay benefits for 7 years before it would run out of benefits!  ($420,000 divided by $5,000 = 84 months = 7 years)

You can get a policy that has no limit on how long it can pay benefits.

A policy with a lifetime/unlimited benefit period means that the policy can never run out of benefits.  It means that there is no cap on the lifetime maximum it can pay.  


Couples can choose to share benefits--essentially doubling how long one could receive benefits!

Most long term care insurance companies allow couples the option to share benefits.  For example, if one spouse/partner has an 8-year Benefit Period and the other spouse/partner has an 8-year Benefit Period, they would have 16 years of “shared benefits”.  

In 43 states, you can protect all of your assets even if your LTCi policy uses up all its benefits!

To help the middle-class plan for long-term care, 43 states have passed special legislation creating a “public-private” partnership.  These “Long-Term Care Partnership Programs” encourage the middle-class to purchase long-term care insurance policies with benefits equal to their net worth.  If their long-term care insurance policy runs out of benefits they can apply for Medicaid to pay for their care and all of their assets can be protected from Medicaid “spend down” and Medicaid “estate recovery”.  Click this link to learn more about long term care partnership policies.  


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