Disability Income • Critical Illness Insurance • Long Term Care • Life Insurance

Elimination (Waiting) Period


Are these days satisfied by Calendar Days, or Service Days? This distinction can have a major impact on how long it takes you to satisfy your LTCi policy benefit waiting period, which must be satisfied before benefits actually begin to accrue.

Calendar Days
Once benefits are triggered, your waiting period is measured by the ensuing days on the calendar.

Service Days
Only days for which care is received count towards satisfying your waiting period. It may take longer to satisfy this period if care is not being received on a daily basis.

Your financial situation, philosophy and goals may impact your ultimate purchase decision today when choosing between Calendar and Service Days.


Benefit Payment Model and the Taxation of Benefits


Are the LTCi benefit payments being received based upon a Reimbursement, or Indemnity model?

Under a Reimbursement Model, benefits received from a LTCi policy are considered a reimbursement for expenses incurred for medical services. Actual expenses must be presented to the insurer for reimbursement. Benefits received under a Reimbursement Model are generally not considered taxable income.

Under an Indemnity Model, a flat maximum monthly LTCi benefit is paid each month, irrespective of actual expenses (although the carrier may ask for receipts, as proof of the on-going claim). Such benefits are received income tax-free, up to the 2014 per diem limit of $330 per day ($9,900 per month). Indemnity benefit payments in excess of this limit during 20 14 are to be reported as taxable income, to the extent they exceed actual Long Term Care expenses. The maximum allowed per diem daily benefit is adjusted annually. The Indemnity Model provides additional flexibility in that benefit payments in excess of actual expenses may be used for other purposes.

Contact me for more information about the distinctions and differences between these two Riders. Prior to any LTCi purchase, it is important to understand the advantages, disadvantages, distinctions, differences, definitions, disclosures and exclusions found in each Model.

Daily or Monthly Benefit Limit Calculation


A Monthly benefit limit approach to claims payment carries with it a slightly higher LTCi premium, but many feel the Monthly benefit limit approach offers more claims paying flexibility, particularly where care is not being received on a daily basis and/or where the cost of care on a given day exceeds the Daily benefit limit. A Monthly benefit limit approach may help aggregate expenses incurred and bridge the potential benefit shortfalls that can occur in a Daily Benefit approach.



LONG TERM CARE MENU
Long Term Care Insurance
Long Term Care National Average Costs
Tax-Qualified "Stand-alone" Long Term Care Insurance
Hybrid Life/Long Term Care Rider Combinations
Plan Design Considerations
Elimination (Waiting) Period
Long Term Care insurance Partnership
Long Term Care Insurance in the Workplace
Paying for Care - Insuring the Risk
Paying for Care - Selling Your Life Policy
Paying for Care - Government and Personal Sources
State Filial Responsibility Laws
Long Term Care Insurance Disclaimers and Notes

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Paul SuPrise, CLU, LTCP
770 Nuangola Road • Mountain Top, PA 18707-9507
570-868-6871 • Fax 570-868-6872
paul@sickpayplans.com
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