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Most long-term care insurance policies offer several choices for the Inflation Benefit.  The most common “Type 2” Inflation Benefit choices are:

  • 3% Compound: the Daily Benefit you choose for your long-term care policy will automatically grow each year by 3% over each previous year’s Daily Benefit.
  • 5% Simple: the Daily Benefit you choose for your LTC policy will automatically grow each year by 5% of your original, Starting Daily Benefit.
  • 5% Compound: the Daily Benefit you choose for your LTC policy will automatically grow each year by 5% over each previous year’s Daily Benefit.

There are several other choices, offered by some long-term care policies, for the “Type 2” Inflation Benefit, including:

  • 4% Compound,
  • CPI-linked Compound,
  • 5% Compound that stops after 20 years,
  • 5% Compound that stops after the Daily Benefit doubles,
  • 5% Compound that stops after the Daily Benefit triples, and many more.

When choosing your Inflation Benefit, the most important thing is to make sure that the Inflation Benefit you choose qualifies your policy for “dollar for dollar” asset protection under your state’s Long-Term Care Partnership program.

To see which Inflation Benefit your state’s LTC Partnership program requires, visit the “Long-Term Care Partnership State Tracking Map”.