Many of our clients ask us questions to lead us to write blog posts.  This post is an example.  Long Term Care Insurance is so different than other policies such as disability insurance and it can be confusing to consumers.  Today a client asked about ways to extend a policy by spending less than her daily limit and saving the difference.

Long Term Care Insurance policies provide you what is called a benefit multiplier.  To arrive at your total benefit, you multiply the daily or monthly benefit in your policy by the time of benefits your policy pays.  You then have the total pool of money available for you to spend on long term care insurance.

An Example of Extending Your Policy:

You have $200 daily benefit, for five years.  The math looks like this:

$200 x 365 days/year x  5 years =  $365,000

This means you have $365,000 to spend, which if you have inflation protection will grow at 5% compounded over time.

In this example, if you only spent $100 daily, your policy would effectively be extended to ten years.  The pool of money derived from the benefit multiplier is yours to use how needed with many policies, up to the policy limits.

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