Daily Benefit Amount

Last updated: March 29, 2016

Know the Costs of Care

You will select a daily benefit maximum when you buy the policy. Choices usually range from $50 to $250 a day. Most policies pay the actual cost of each day of care at a nursing home up to the daily maximum amount you select.

  • The premium cost will be higher if you choose higher daily maximums. 
  • You will be responsible for the difference if actual care expenses exceed your daily benefit amount. 

Generally, policies pay benefits using either an “actual expenses incurred” method or an “indemnity” method:

An actual expense policy pays benefits only when eligible services are received. 

  • For example: Assume you have a policy with a maximum daily benefit of $70 and the nursing home charges only $65 per day. The policy will only pay $65 per day because the actual charge is less than the $70 maximum daily benefit. 

An indemnity policy pays benefits as specified in the policy without regard to the specific services received. 

  • For example: Again, assume your policy has a $70 daily benefit and the nursing home charges only $65 per day. An indemnity policy will pay $70 per day. 

For either policy, benefits will be paid to you, or you may “assign” your benefits and have them paid directly to the nursing home. 

It’s important that you know how much nursing facilities in your area charge before you select a benefit amount. 

  • You should contact two or three nursing facilities in your area to determine current price ranges for daily care. 

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