LTC Riders: Understanding the Differences in Design

Our LTC Rider on Income Advantage IUL and Life Protection Advantage IUL follows what is known as a reimbursement rider model. Many other companies use an indemnity model. Knowing the difference is important.

Here’s a basic definition:

  • Indemnity — Policyowner can take rider benefits up to the maximum monthly benefit limit regardless of the actual expenses incurred.
  • Reimbursement — Policyowner is reimbursed based on actual expenses incurred by the insured, up to the maximum monthly benefit limit.

At first glance based on the definitions alone, an indemnity rider may seem like the obvious choice, that your client has access to greater benefits and that they won’t need to prove expenses. But once you’ve taken the time to delve into the product details and considered real-life situations, a reimbursement rider may prove to be more beneficial.

Watch the Reimbursement vs. Indemnity Model video to understand the differences, to see case studies of how the models impact the maximum benefit limits and the duration of benefits, and a comparison of rider models used throughout the industry.

For even more information on our new LTC Rider, go to

LTC Riders: Understanding the Differences in Design