What is the Difference Between Reimbursement, Indemnity, and Cash Benefit Type Policies?

There are generally three different types of long term care insurance policies. They are as follows:
1. Reimbursement
2. Indemnity
3. Cash Benefit
Reimbursement Policy. This is the most common type of long term care insurance policy, it also known as an “Expense-Incurred Policy.” To prove benefit eligibility you are required to meet the need for assistance with Activities of Daily Living (ADLs) or severe cognitive impairment criteria as indicated in your policy. Benefits become available only when eligible services are received. This type of coverage reimburses for the expenses incurred or up to your policy’s monetary limit, whichever is less.
Indemnity Policy. Allows you to be reimbursed your full daily benefit amount every day a covered service is received, regardless of the cost for that service. For example, if the cost of your covered service adds up to $100 a day, and your daily benefit amount is $150, the insurance company will reimburse you the full $150 each day. If you incur $250 of covered services, you will be reimbursed $150. Different insurance companies may offer some variations.
Cash Benefit. Once you are determined to be eligible to receive benefits the carrier will pay your Daily Benefit Amount (DBA) regardless of whether services are provided each day and without having to submit bills, up to your total amount of coverage for as long as you continue to be eligible to receive benefits.