Disability-Model LTCs Can Be an Option for Some Clients National Underwriter (Life/Health) (09/11/00) Vol. 104, No. 37 p.31; Goldstein, Peter M.
The most common long-term care insurance policies provide reimbursement for services used. However, the lesser known "disability model" seems to be gaining popularity. Although the disability model has been around since 1987, it has seen limited use. The attraction of the disability model is its simplicity. If the insured meets the benefit trigger, the policy pays a cash benefit. This benefit is paid even if the insured obtains care. Insureds can use this cash payout to cover non-licensed provider care. Insureds can also pay for services not covered in the policy, including reimbursing family caregivers. Agents particularly like this product because it is easy to sell. With a "qualify-and-get-paid" approach, there is no discussion over what is or is not covered. However, there are some downsides to the disability model. Policyholders must manage their own expenses. Also, the cash from the policy might be used for things other than its intended purpose. Despite the shortcomings of the model, however, it has sparked enhancements to the reimbursement approach.