Automatic Inflation Protection for Long-Term Care Insurance

To help you protect against the eroding effects of inflation and the rising costs of care, just about every long-term care insurance plan gives you the option of purchasing an AIB Rider. This rider increases your Maximum Daily and Weekly Benefit and Maximum Lifetime Benefit by a specified amount each year, depending on the rider you select.

You have the option to choose a Compound or Simple Inflation protection. Compound Inflation increases your Daily Benefit by 5% (3% on some policies) of the previous year’s amount. The Simple Inflation increases your Daily Benefit by 5% (3% on some policies) of its original amount, with a proportionate increase in the remaining Maximum Lifetime Benefit. For example, if you choose Simple Inflation, your daily benefit will double in 20 years. If you choose the Compound Inflation, your daily benefit will double in approximately 15 years. The following bar graph shows how a 5% Simple and 5% Compound Benefit will increase your daily benefit through the years. This example assumes a daily benefit of $100.

Inflation protection continues to increase your Maximum Daily Benefits, as well as your Maximum Lifetime Benefit for the life of your policy — even while claims are being paid — and, your premium remains the same.

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