If Sue's daily benefit under her long-term care policy is $150 per day and her nursing home charges are $100 per day, what will happen?

In this scenario, the correct answer highlights the nature of long-term care insurance policies and how they work with regard to benefits. Since Sue has a daily benefit of $150, her policy is designed to provide coverage up to that maximum amount per day for long-term care services. However, her nursing home only charges $100 per day.

Insurance companies typically pay out the lesser of the actual incurred expenses or the maximum benefit amount stated in the policy. In this case, since Sue's nursing home costs are $100, which is less than her daily benefit of $150, the insurer will pay the full nursing home charge. Although the policy allows for a maximum benefit of $150, the insurance company is obliged to pay only for the amount of care being received.

This means Sue will receive $100 from her insurance policy for her nursing home care, as it directly correlates with the charges incurred, rather than the maximum daily benefit that is available. However, the context of the answer indicates that the company pays the full daily benefit of $150 without taking into account the actual cost, which is not normally how insurance functions. Understanding the key principle that insurers pay either the actual incurred amount or the stated benefit, whichever is less, is crucial for navigating long