Health and Life Insurance

Answer: A - The type of long-term care insurance policy that pays a policy holder a fixed amount of dollars per day, up to a specific amount of total benefits, regardless of the expense that is incurred is considered an indemnity plan. Indemnity plans pay an insured a fixed amount of dollars rather than reimbursing them for the actual expenses that were incurred. For example, if an insured owns an indemnity-type of long-term care policy that pays $100 per day in benefits and the care that the insured receives costs $75 per day, the insurance company will still pay the insured $100 per day in benefits.