Benefit pool
When you cannot perform at least two of these six ADLs and your policy is activated, you begin to draw on something called your
“benefit pool
.” This is created when you initiate your policy. The company designates a pool of money by multiplying the monthly rate at that time by the number of months the policy covers. This pool then continues to grow by the inflation factor. If you are disabled today and your benefit level is $7,700 per month for five years, your benefit pool will have grown to $462,000 ($7,770 x 60 months).
This means you will have that amount of money to spend on your long-term care. Because your policy is comprehensive, you will be able to use your benefit pool to pay for your care at the level you need. If, for instanceexample, you are in a nursing home, you will use up your benefit pool in 5five years at the rate of $7,700 per month., b But if in-home care is enough for you, at the rate of, for exampleinstance, about $4,500 per month, your benefit pool will last for about 103 months or eight8 years and five5 months.
If, on the other hand, your benefit level is $4,500 per month for five years, your benefit pool will have grown to $270,000. This will be enough for five years of home healthcare but will cover only part of your monthly nursing home costs. , or iIf you use it to pay the full monthly nursing care costs, it will last for only about 35 months.
Why LTCI
LTCI is not just for the end-of-life years. Some people begin it during their prime working years because it guarantees care in case of work injury or sudden debilitating illness. Whether you need your LTCI early in your life or near its end, your care will be paid for up to the amount in your benefit pool. This will give you some protection against exhausting your resources or those of your family. Because LTCI is expensive insurance, you will want to think carefully, consider all these factors, and buy the policy that best fits your needs and your life expectancy. You will also want to be sure to use the services of an experienced and qualified LTCI specialist.
If you have questions or want to consider a policy, contact Randy Yoder, Long-Term Care Specialist, at 847-849-0205.