The single most expensive rider that is on most Long Term Care Insurance plans is the Inflation Protection rider. This is a critical decision when considering Long Term Care insurance.
The good news is, deciding what type of inflation protection to buy can be fairly cut and dry once we make a few assumptions:
- Are you likely to need care in the next 10-15 years?
- Do you have longevity in your family history?
Once you've answered these questions, selecting the appropriate inflation protection is pretty easy.
- If a claim is 15+ years in the future (that's true for most buyers) you're best off having 5% Compound Inflation Protection.
- If a claim is likely less than 15 years away, you'd want to select 5% Simple inflation.
Real World Example: Bonnie and Wayne
The chart below calculates benefits for a married couple, Bonnie and Wayne. The first set of numbers show's the amount of benefit Bonnie can expect in 11 years. Even in this short period of time, compound inflation protection has yielded a $21,171 advantage over 5% simple.
These matters can be confusing when generalized. Let one of our expert advisors email you specific numbers for your situation.