Cash indemnity benefits offer value to many clients compared to reimbursement plans — or even basic indemnity plans. Because the insurance company does not restrict how LTC benefits are used, and requires no monthly paperwork to collect benefits5 — cash indemnity policies may be more flexible and easier to use.
Cash indemnity plans do not discriminate against alternative care services, and no permission is required in order to use LTC benefits to pay for such care.
Reimbursement plans may have contract language to address use of alternative care services — but there are standards the alternative care service must meet to gain approval — thus the insurance company has the authority to decline benefit payments for these types of services.
Cash indemnity plans can be used to pay immediate family members or unlicensed caregivers that may be less expensive to provide 100% of the insured’s care.6 Reimbursement plans generally do not allow immediate family members to be reimbursed for providing care to the insured and often have limitations or deny reimbursement for unlicensed care providers.
Cash indemnity benefits can be used to pay for care services existing now as well as services invented in the future. This would include traditional care services as well as alternative or “boutique” care services.
One cannot predict if a reimbursement plan would pay for creative or alternative services invented in the future.