Benefit Period

When you first buy Long-Term Care Insurance, you may be asked to select how many years you'd like to receive benefits. Many people think this is the maximum length of their policy. However, this is actually the minimum length or benefit period.

The benefit period starts the first day you receive benefits from your policy. It ends when the money available in the policy has been exhausted.

The benefit period is not how many years you've chosen to receive benefits. It's a math equation that determines the amount of money in your benefit account.

For example, if you have $3,000 benefits a month and a 3-year-benefit period, you'd multiply 3,000 x 12(months) x 3(years) = $108,000 in your benefit account.

Most people have a plan of care that starts with at-home care. This care usually starts small, for example, 4 hours a day, 4 days a week. This means most people do not use the maximum benefits available daily or monthly.

You won't lose that money if you don't use the maximum available benefits available each day or month. The leftover money stays in your benefit account and grows with inflation (if you have an inflation rider).

When you apply for Long-Term Care Insurance, you select the daily/monthly benefit, benefit period, and riders. Some companies avoid the benefit period altogether because of the confusion it may cause. These companies let you select the amount in the initial pool of money instead of a benefit period.