Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceMedium
A client is considering a Long-Term Care (LTC) policy. They are particularly interested in a provision that ensures their benefits will increase over time to keep pace with rising costs of care. Which rider would provide this feature?
- AReturn of Premium Rider
- BGuaranteed Insurability Rider
- CWaiver of Premium Rider
- DInflation Protection Rider
Show answer & explanationAnswer & explanation
Correct answer: D. Inflation Protection Rider
The Inflation Protection Rider is specifically designed for Long-Term Care policies to increase the daily benefit amount over time, usually at a simple or compound rate, to help offset the rising cost of long-term care services.
Why the other options are wrong
- A. Return of Premium Rider returns a portion of premiums paid if the policy is not used or canceled, not an inflation adjustment.
- B. Guaranteed Insurability Rider allows the insured to purchase additional coverage without evidence of insurability, not an inflation adjustment to existing benefits.
- C. Waiver of Premium Rider waives future premiums if the insured becomes disabled or requires LTC, but does not increase benefits.
Inflation Protection Rider (LTC)
An optional rider in a Long-Term Care insurance policy that increases the daily benefit amount periodically to help the policyholder maintain purchasing power against the rising costs of long-term care services.
- Increases daily benefit amount.
- Helps combat inflation in healthcare costs.
- Can be simple or compound interest rate increases.
Memory trick: Inflation Protection 'inflates' your care coverage.