Insurance
Out-of-pocket gap
What the policy does not pay and the household must fund.
The Formula
Gap = total cost - monthly benefit x benefit months
What the policy does not pay and the household must fund.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| b | Monthly benefit | currency | Benefit the policy pays each month. |
| m | Benefit period | months | Months the policy will pay. |
What Each Symbol Means
bcurrency
Monthly benefit
Benefit the policy pays each month.
mmonths
Benefit period
Months the policy will pay.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate long term care insurance page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Long Term Care Insurance, filed under Finance. Every number the guide produces comes from substituting into this one line.