Home Page |  About Us  |  FAQ's  |  Providers  | Applications  | California Birth Profiles  Contact Us 

HomeLong Term Insurance Health Plans
LONG TERM HEALTH PLANS

What Other Policy Features Are Available?

Inflation Protection

Most people buy long-term care many years in advance of when they may need care. The long-term care insurance you buy today must cover the costs of care 10, 20 or more years in the future. Inflation Protection is intended to help maintain the value of the benefits you purchase today so they will keep up with future increases in the cost of care. In the past, long-term care costs in California have increased at an annual rate of more than 5% - a faster rate than the general increase in the cost of living for items such as food. Experts estimate the cost of long-term care will continue to increase by 5% annually. If costs do increase by 5 % annually, the cost of care will double every 14 years. A day in a nursing home that costs $141 today, will cost $282 a day in 14 years; a year's stay in a nursing home that costs about $51,465 today will cost $102,930.

Protecting against the rising costs of care is one of the most important choices you will make. Inflation protection increases the Daily Maximum, the Maximum Lifetime Benefit, and other benefit amounts. If you purchase individual long-term care insurance, your insurer must offer you at the time you purchase the policy the option to purchase an inflation protection feature. You will be given a choice between two ways of protecting the value of your benefits against inflation: (1) a Built-in Inflation Protection feature that automatically increases the value of all the policy benefits annually (using either compound or simple interest increases) or; (2) a Benefit Increase Option.

1. Built-In Inflation Protection. The insurer is required by California law to offer you the option of a built-in 5% annual compound inflation protection feature that automatically increases your previous year's Daily Maximum and Lifetime Maximum Benefit amounts by 5%. If you decide not to purchase the built-in 5% compound annual inflation protection feature, you will be asked to sign a rejection of the offer. Some insurers may also offer you the option of a built-in 5% annual simple inflation protection that automatically increases each year the Daily and Lifetime Maximum Benefits by a fixed 5% of the amounts in your original policy.

2. Benefit Increase Option. The other inflation protection option is called a Benefit Increase Option. This option allows you to pay an additional premium to increase the benefit coverage amounts at stated intervals during the life of the policy (often referred to as guaranteed insurability or future purchase options). There is usually a limited number of increase options offered to you over the life of the policy. If you decide not to exercise this option one or more times when it is offered, you will lose any chances to increase your benefits in the future.

With built-in inflation protection, the premiums are designed to remain level and not increase even though your benefit coverage amounts increase each year. The increases in your benefits will continue as long as you keep the coverage, even while you are receiving benefits. Policies with built-in inflation protection cost considerably more initially, since they automatically include the annual increases in benefits you need to keep pace with inflation.

Agents must show you an illustration of the effect of inflation on the cost of care, and how the benefits of a policy with and without inflation protection compare to the cost of care over time.

Long Term Insurance | Bluecross Long Term | California Long Term Insurance | Kaiser Long Term |

Long Term PPO plans| Long Term Medical plans | Long Term Dental Insurance |

Long Term Group Insurance | Long Term Blueshield | Long Term Health Insurance |

Long Term Health plans | Long Term Health net | Long Term Pacificare | Long Term Medical Quote |

Long Term Aetna PPO plans | Long Term Insurance Quote | Long Term HMO plans |

Long Term Life Insurance | Long Term Dental plans