Merritt Personal Lines Manual: How Long Will the Policy Pay?

Another key consideration when shopping for LTC insurance is how long the policy will continue to pay you benefits. This is the benefit period (BP). An LTC policy will not simply pay you benefits for life. You have to choose the length of the benefit period -- and pay premiums accordingly.

Most insurance companies will offer benefit periods of one to five years and some offer lifetime benefits -- but these are expensive policies.

Some policies may contain both a BP per stay and a lifetime maximum benefit period. For instance, a policy may offer a three-year benefit period per nursing home stay, but a maximum lifetime benefit period of five years. So, if Sam were confined to a nursing home on three different occasions for periods of six months, one year and two years, he would receive the benefits he was entitled to for each stay, since each of these stays was no longer than three years. In addition, he would have used up three-and-one-half years of his five-year maximum lifetime benefit, leaving him with one-and-a-half years of additional coverage.

As you might expect, the longer you will receive benefits, the higher the premium.

The Effect of the Benefit Period on Premiums