When deciding how you’d like to customize your long-term care (LTC) policy, you will most likely face a decision on whether to have an inflation rider or forgo any inflation protection. Before deciding what is best for you, it is best to understand the benefits offered by a compound inflation rider.
Purchasing an inflation rider can help ensure that your LTC benefit is adequate, considering the cost of medical care continues to increase each year. As your benefits grow, you’ll feel more at ease knowing whatever the cost of care is, your policy will help support expenses related to your facility or in-home care.
In 2016, the average cost of a private room in a nursing home facility was $229 per day or $6,965 per month. For people purchasing long-term care protection, the need for inflation rider is critical. Statistics show that the median cost of a nursing home facility is increasing 5 percent annually.
Knowing what the future holds for the cost of your care, you’ll want to choose the right amount of inflation protection for your LTC policy. Compound inflation protection amounts can vary, typically from 3 to 5 percent. Choosing an inflation rider affects your daily and monthly benefit.
For example, let’s say you are 50 years old. You selected a daily benefit of $150 and you’ll need care in 20 years. Your daily benefit compounds to be around $271 with a 3 percent inflation rider. With the 5 percent inflation rider, it potentially could compound to $398 after 20 years. The younger you are when you buy your long-term care policy, the more likely you’ll need a higher inflation rider.
The ideal age to purchase your LTC policy is 50 to 60 years old. Premiums will be more attractive and your insurability will be protected as well. People under age 65 account for nearly 41 percent of long-term care due to diseases, disability, mental illnesses, or developmental disabilities.
Don’t wait to purchase your long-term care policy, and ask D. Ward about inflation rider options. The reality is that 70 percent of people 65 years of age or older will need long-term care protection. Prepare for your future today.
D. Ward Insurance would be happy to answer any questions you may have about Long-Term Care policies or to begin the process of getting a Long-Term Care Policy for yourself. Call us today at 770-974-0670 or click the button below to request a quote. We look forward to doing business with you!
Disclaimer: This report is for information purposes only and is not to be construed as definitions of policy coverages or limits. This report does not alter, amend, or change the policy wording and the intent of this report is to bring attention & to have a conversation with D. Ward about your insurance needs.