The short version, no math:
If you’re 70-75 years old, and think you may use your Long Term Care Insurance plan in the next 10-15 years, 5% Equal or 5% Simple Inflation Protection may be the best option for you. On the other hand: If you’re under 70, in almost every case, 5% Compound Inflation Protection will give you better value.
The math: Why Compound is superior.
Category
LTC Terms
Simple or Equal Inflation vs. 5% Compound Inflation Protection
Long-Term Care Insurance: Definitions by Importance
Socrates once said “the beginning of wisdom is the definition of terms.” If you’re just starting to learn Long-Term Care Insurance, the terms can be overwhelming. The signal-to-noise ratio of sites offering advice is terrible and getting worse.
Guaranteed Renewable Long Term Care Insurance
Guaranteed Renewable Long Term Care Insurance policies cannot be cancelled down the road when your health changes. While you as a consumer can cancel anytime, the insurer cannot arbitrarily cancel your policy if it is Guaranteed Renewable.
After all, Long Term Care Insurance is something you buy whenyoung and healthy with an expectation of use well into the future.
Tax-Qualified Long Term Care Insurance
Tax-Qualified Long Term Care Insurance policies save money because you do not pay taxes on benefit payments, which can easily exceed hundreds of thousands of dollars.
Tax Deductions Also Possible
Tax-Qualified Long Term Care Insurance policies are also tax deductible in certain circumstances.