An LTC Case Study

Almost 20 years ago my mother purchased a long term care policy with the following benefits:

• Daily Benefit: $75
• Annual Benefit Increase: 5% Simple
• Benefit Period: 3 Years
• Annual Premium: $1,200

At year 18, she went on claim.

• Total premiums paid; $21,600
• Monthly benefit: $4,200
• Benefit Period to recapture premiums paid: 5.1 months
• Monthly benefit ($4,200) x 36 months = $151,200 (total benefits over 3 years)

My mother is now into her 2nd year of benefits.

I project that she will use all three years of benefits.

Should this occur, her benefits received will be exactly 7 times her total premiums paid.

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