Designing a Plan

There are three required benefit choices one has to make when designing a plan.

  1. Maximum Daily or Monthly Benefit  -  This is how much money that you want the insurance company to reimburse you on a daily or monthly basis, if you should become eligible for benefits.   Though choosing to receive a Monthly benefit raises your premium, it is worth the added expense.
  2. Benefit Period  -  This is a number of years.  You can choose as few as two years and as many as a lifetime.  This is simply a multiplier that the insurance company uses to calculate your Total Lifetime Benefit.  If you multiply the number of months in the Benefit Period by the Monthly Benefit, you arrive at your Total Lifetime Benefit, often referred to as your “pool of money”.   You should interpret the Benefit Period, as the fewest number of years that the plan will last.  It is actually the pool of money that determines how long your benefits will last.
  3. Elimination Period  -  This is a deductible, which is expressed as a length of time, usually 30, 60 or 90 days.  Most people choose a 90 day elimination period with a zero day, home care elimination period rider. 

Optional Benefit Riders

Inflation Protection  -  If you are below the age of 70 you should seriously consider the affect that the rising cost of health care will have on the value of your pool of money.  $100,000 today will not buy the same amount of care in 15 years as it will today.  So the younger you are, the more inflation protection you want to incorporate into your plan.  You can purchase up to 6% compound inflation protection with some plans.

Waiver of Home Care Elimination Period  -  This rider allows you to start receiving benefits as soon as you come home from a skilled care facility,  i.e. hospital, nursing home, rehabilitation facility.

Shared Care  -  Most couples see the value in joining their separate pools of money, to create a shared pool of money.  This doubles the amount of money available to either of the partners should they exhaust their original amount of money.  If one partner dies, and still has benefits left, the surviving partner inherits those benefits.  However, they no longer have to pay the deceased’s premium.  In essence, the surviving spouse may double their benefits and cut their premium in half or by an even greater amount.