What is the “Cash Benefit” in a Long-Term Care Insurance Policy?

Cash Benefit = a feature in a long-term care insurance policy that allows the policy benefits to be used by the policyholder in any way he/she chooses.  A “cash benefit” is often used to pay a family member to provide care.  A “cash benefit” can even be used to pay a spouse to provide care.  There are usually no (or very few) restrictions on how the policyholder can use the “cash benefit”.  

A few policies allow for 100% of the benefits to be payable as a “cash benefit”.  These are typically called “cash policies” or “cash indemnity policies”.  

Most policies that have a “cash benefit” feature pay less than 100% of the benefits as a “cash benefit”, typically 33% to 50% of the benefits.

This is also called a “cash alternative benefit” or “alternative payment benefit”.
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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.