WHAT HAPPENS WHEN LONG TERM CARE COSTS RISE (INFLATION PROTECTION)?
Inflation protection can be one of the most important additions you can make to a long term care insurance policy. Inflation protection increases the premium. However, unless your benefits increase over time, years from now you may find that they haven’t kept up with the rising cost of long term care. The cost of nursing home care has been rising at an annual rate of 5% for the past several years. This means that a nursing home that cost $150 a day in 2000 will cost $398 in 20 years, if inflation is 5% a year. Obviously, the younger you are when you but a policy, the more important it is for you to think about adding inflation protection. You can usually buy inflation protection in one of two ways: automatically or by special offer. Automatic inflation protection. The first way automatically increases your benefits each year. Generally, there would be no increase in premium when the benefit is automatically increased. Policies that increase benefits for inflation automatically may use
