Is my Long Term Care Insurance Daily Benefit the same as When I Originally Purchased my Policy?

 

If your policy has a built-in inflation benefit, it is likely that your daily benefit is much higher than the one stated on your printed policy. You can figure out your daily benefit by taking the initial daily benefit and inflating it each year by the stated percentage (see examples below). If you have, instead of a built-in inflation percentage, an option to purchase future coverage, the amount of your current daily benefit will depend on the value of the options that you exercised. Your insurance company can tell you the daily benefit of your policy.

 

How 5% compound inflation increases the amount of insurance each year of a policy that was originally bought with a $100 daily benefit: Purchase year 1: $100 Year 2: $105 ($100 multiplied by 1.05) Year 3: $110 ($105 multiplied by 1.05) Year 4: $116 ($110 x 1.05) Year 5: $122 Year 6: $128 Year 7: $134 Year 8: $145 Year 9: $152 Year 10: $160 and so on....

 

How 5% simple inflation increases the amount of insurance each year of a policy that was originally bought with a $100 daily benefit: Purchase year 1: $100 Year 2: $105 ($100 plus 5% of the original daily benefit amount) Year 3: $110 ($105 plus 5% of the original daily benefit amount) Year 4: $115 ($110 plus 5% of the original daily benefit amount) Year 5: $120 Year 6: $125 Year 7: $130 Year 8: $135 Year 9: $140 Year 10: $145 and so on....

 

Read your policy to find out exactly how your inflation protection works to increase your daily benefit over the years.

 

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