Does this mean that the prefunded plan by itself doesn't fulfill the need particularly when the benefit payment period are restricted. Also, if such a benefit structure doesn't fit in the needs of a LTCI where the care is long term because the expectation is that ability levels will deteriorate, or at least not improve, in the future why at all a limited period benefit payment plan. Any views/clarification to help my understanding of LTCI.
I don't think this statement is trying to imply that a pre-funded product does not fulfil this need - it is just highlighting the main need met by an immediate needs product. I'm not sure exactly what you're asking in your second sentence. If you're still confused, maybe you could clarify it a little more?
The study material says "The second type, called immediate needs plans, are purchased by long-term care claimants to protect them against the uncertain survival duration". My question was "Does this mean that the risk of uncertain survival is not covered by the prefunded plans"
Does it refer to uncertain survival before the claim? If you have a pre funded product you may die before it comes into payment. So the fact that your survival is uncertain means you could have paid for cover you will never use. So it's more of a value for money argument.
As I stated in my previous post, no, it doesn't mean that pre-funded LTCI plans don't cover uncertain survival duration; unless there is a fixed benefit period, they will pay out until the insured dies. However, pre-funded plans will also cover the risk of needing care in the first place. Immediate needs plans don't cover this as the policyholder definitely does need care at the point that they buy the policy. So: prefunded products cover: - the risk of needing care at some point in the future, and - uncertain survival (while care is being received), whereas immediate needs products only cover the latter.
