California Life-Only & Accident and Health AgentRelated Benefits and ProductsEasy
A client is reviewing their existing long-term care insurance policy and is concerned about the impact of inflation on future care costs. They recall that their policy includes a feature designed to automatically increase the daily benefit amount over time without requiring evidence of insurability. Which policy feature are they most likely referring to?
- AWaiver of premium
- BGuaranteed renewability
- CNonforfeiture option
- DInflation protection
Show answer & explanationAnswer & explanation
Correct answer: D. Inflation protection
Inflation protection is a standard feature in long-term care insurance policies designed to automatically increase the daily benefit amount to combat the rising cost of care over time. This ensures the policy's benefits maintain their purchasing power.
Why the other options are wrong
- A. Waiver of premium exempts the policyholder from paying premiums under certain conditions, usually after a period of disability.
- B. Guaranteed renewability ensures the policy cannot be canceled by the insurer, but it doesn't automatically increase benefits.
- C. Nonforfeiture options provide benefits if the policy is surrendered or lapses, not inflation adjustments.
Inflation Protection (LTC)
A feature in long-term care insurance policies that automatically increases the daily benefit amount to account for the rising cost of care over time.
- Helps maintain purchasing power of benefits.
- Typically offered as simple or compound interest options.
- Usually an optional rider, but often recommended.
Memory trick: Long-Term Care policies 'P.R.O.T.E.C.T.' you from rising costs.