The Advisor's View of Long-Term Care Planning

With LTC insurance, 5% compound inflation isn't a good deal anymore - and here's proof

Posted by LTCI Partners | Feb 21, 2014 10:54:00 AM

Those who have been selling LTC insurance for a while know that automatic inflation option is a popular option - and has been since LTC has been sold.  However, with new products and pricing, is it a smart choice? You might be surprised at the answer.

This graphic demonstrates how much benefit is available from a prominent LTC carrier with its latest product by choosing no inflation versus 5% compound.  The benefit pool with no inflation is more than double the pool for 5% compound, which takes almost 25 years to catch up. In addition, the monthly benefit for no inflation is $9,100 per person - compared to an initial amount of $2,707 for the 5% compound. 

The simple lesson - like buying term life insurance, you just may want to buy a bunch more coverage up front. 

No inflation

 

Topics: For financial professionals

Written by LTCI Partners

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