How is a long-term care insurance policy’s “Policy Limit” calculated?

The “Policy Limit”  is the most that your long-term care  policy can pay in benefits over your lifetime.  It is also referred to as the “Maximum Lifetime Benefit”.

The “Policy Limit” is usually calculated by multiplying the Daily Benefit by 365 and then multiplying that amount by the number of years in your Benefit Period.

For example, if you choose a $200 Starting Daily Benefit, and you choose a 6-year Benefit Period, your starting “Policy Limit” would be $438,000. That is calculated as follows:

$200 per day x 365 days per year x 6 years = $438,000

(If a long-term care policy has a “Monthly Benefit” amount, rather than a Daily Benefit amount, the Policy Limit is calculated by multiplying the “Monthly Benefit” by 12 and then multiplying that amount by the number of years in the Benefit Period.)


About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.