Why isn't my father receiving the right amount of money from his long term care insurance company?
My father moved into an assisted care facility in April and filed a claim with his long term care insurance company. It took 4 months for it to be approved and for payment to be sent. His policy states that he will be paid $114.59 a day for his long term care, not up to that amount but $114.59. He also received a letter on March 3, 2011 stating that he would receive $114.59 per day. When he received his payment they had only paid him what the rest home charged which was $109.00 per day. Shouldn't he be paid the $114.59 as it states in the policy regardless of the charges of the rest home?
There are two types of payments from long term care insurance policies. The most common one is reimbursement-based. This pays for costs that are actually incurred by the beneficiary. In your father's case, he only paid $109 per day, so that is what he is reimbursed for. The other type is indemnity-based, sometimes called cash-based. With this type, the policy pays the maximum daily (sometimes monthly)rate as long as the beneficiary received some covered care during that time period. If your father has an indemnity policy, it should pay $114.59. You need to read the policy. You will probably find that it is reimbursement-based.
Long-term care insurance is to be avoided altogether, in my opinion. Insurance only works if a small percentage of the population will benefit. This is not the case with LTC insurance. Most who apply will eventually need it (the others have devoted family support they can count on).
So the premiums are high. You're better off to save the money & pay for eventual LTC yourself if you wind up needing it.
The key word here is SAVE. Stop spending insanely, save for those rainy days! Americans hardly know the word. Gotta have the latest iPad and iPod and whatever other gadgets Steve Jobs comes up with, 60" TV, gas-hogging SUV. Time to save instead. At least 10% of your income. And don't wait 'till you're 55. Has to start the day of your first job.
Barbara is right, your father must have purchased a reimbursement policy. This will only pay the exact amount of your bill and the rest will be kept in the pool of money. If it's an Indemnity long-term care insurance, then he should receive the full amount stated in his policy. Read your father's policy first and if the insurance company is really at fault then bring this to their attention.
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