Simply put, Cash Model policies repay the insured their total benefit that they purchased, regardless of costs that are incurred. Additionally, the insured does not have to submit claim forms, to get reimbursed. Every month, they get their full benefit purchased, regardless of who is providing their care. The person does not have to be a licensed caregiver.

Cash Model Example

John purchases a Cash Benefit Long Term Care Policy with a coverage of $150.00 a day. John later needs Home Health Care services and the cost is $80.00 per day. John’s Cash policy would pay him the full $150.00 regardless if the cost is less. John’s additional $70.00 per day he receives, allows him to use whatever he wants with the additional money.

Tax Treatment of Benefits Received

For policies that pay benefits under the Cash Model, the benefits received are considered Tax Free up to an annual limit imposed by the IRS.