Long-Term Care insurance and inflation protection helps keep pace with the increased costs of health care services. Simply stated, inflation means that products or services (long-term care services) will cost more in the future than they do today. Some costs rise slowly, some rise faster than others. But, long-term care is expensive now and costs will almost certainly rise in the future.
When you are considering the purchase of long-term care insurance for yourself or a family member, it is extremely important to look closely at how inflation can affect your future. Without inflation protection in your long-term care insurance policy, you may find yourself with benefits that pay only a small portion of the actual costs of your future long-term care.
If the time ever comes when you need care in your home or in a long-term care facility, you need to make sure that the insurance policy will pay most of your expenses. If you purchase a policy without inflation protection and use it 20 years from now, you will need to pay the difference between what the insurance pays, which is based on costs 20 years earlier, and the actual cost of care. That is because the insurance benefits will not have kept up with the rising costs of services.