Cash benefit option is a provision in some long-term care, chronic illness, or supplemental health policies that allows the insured to elect benefits as unrestricted cash instead of reimbursement for specific covered services. When activated, the policy pays a preset monthly cash amount or percentage of the maximum benefit whenever claim triggers are met, such as needing help with activities of daily living or having severe cognitive impairment. Because the benefit is not tied to itemized bills, the insured can use funds for family caregivers, travel, household help, or other needs. Flexibility is high, but cash options may cost more or provide lower maximum benefits than reimbursement-only designs.

Advisors present cash benefit options to clients who want the freedom to pay spouses or children for care, hire informal helpers, or cover nontraditional expenses that standard reimbursement rules might reject. During case design, they compare premiums and projected benefits under cash, reimbursement, and blended models. Claims teams verify eligibility"typically ADL or cognitive triggers"then issue cash payments without requiring detailed receipts. Advisors explain tax treatment when the option is attached to a 7702B-qualified LTC or 101(g) chronic illness rider. Understanding cash benefit options helps advisors tailor long-term care solutions for clients who prioritize control, simplicity, and support for family caregivers.