What are some common choices you have for a “Type 2” Inflation Benefit

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”.

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About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.