Benefit Choices of Comprehensive Long Term Care Insurance

3. Inflation Protection

No Inflation Growth
No inflation benefit means that your Monthly Benefit will stay the same for as long as you own your policy. For example, you may decide on a benefit of $4,000 per month when you purchase the policy. Whether care is needed now or ten years from now, the benefit paid out will only be $4,000 per month. If you are over the age of 75 we recommend considering this option.

Automatic Compound Inflation Growth
In a compound inflation policy, each year the benefit amount is increased by a percentage. You can choose an interest rate between 1% and 5% compounded annually to grow your benefits. The most common is a 3% compound increase. A 3% compound policy that provides a $4,000 monthly benefit, increased at 3% per year, will pay $5,219 per month in ten years. We recommend some level of the compound inflation benefit for anyone, especially those under the age of 65.

The automatic inflation benefit increase does NOT cause the premium to increase. A sound Long Term Care policy is known to be “Level Premium”, meaning the benefits increase but the premium stays the same. For most policies, the automatic increases in the Monthly & Total Benefit continue even while you are on claim and receiving benefits.

When you purchase long-term care insurance, you will want your policy to stand the test of time. The costs of long-term care are expected to increase just like they have done in the past. In fact, over time, the costs of long-term care can double or triple what they are today. Depending on the state that you live in, you will have several choices of inflation protection options. These options increase your benefits over time, but your premiums are designed to stay level for the life of your policy.