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Other Insurance Policy Features

Inflation Protection

Protecting against the rising costs of insurance care is one of the most important choices you would make. Inflation protection increases the Daily Maximum, the Maximum Lifetime Insurance Benefit, and also other benefit amounts. If you purchase individual long term insurance policy, your insurer must offer you at that time. You then buy the policy with the option to purchase an inflation protection policy feature. You would be given a choice among two ways of protecting value of your insurance benefits next to inflation:

(1) A Built-in Inflation Protection feature, which automatically increases the value of all the insurance policy benefits yearly (using either complex or simple interest increases) or;
(2) A Benefit Increase Option.

1. Built-In Inflation Protection. The insurer is required by California state law to offer you the option of a built-in 5% annual compound inflation protection feature that mechanically increases your prior year's Daily Maximum and even Lifetime Maximum Insurance Benefit amounts by 5%. If you decide not to buy the built-in 5% compound annual inflation protection policy feature, you would be asked to sign a rejection of the offer. Some insurers might also offer you the option of a built-in 5% yearly simple inflation protection, which automatically increases each year the Daily and Lifetime Maximum Insurance Benefits by a fixed 5% of the amounts in your actual policy.

2. Benefit Increase Option. The other inflation protection feature option is called a Benefit Increase Option. This option allows you to pay an extra premium to increase the insurance benefit coverage amounts at stated intervals during the life of the insurance policy (often known as guaranteed insurability or future purchase options). There are generally a limited number of increase options offered to you over the life of the insurance policy. If you decide not to exercise this option one or more times when it is offered, you would lose any probability to augment your insurance benefits in the future.
With built-in inflation protection policy, the premiums are intended to remain level and not increase even though your insurance benefit coverage amounts increase each year. The increases in your insurance care benefits would continue as long as you keep the coverage, even when you are receiving benefits.

Premium Discounts and Other Premium-Related Benefits

The premium you would pay might be adjusted from the ‘normal’ rate for a single individual. Many companies present good discounts if both spouses purchase Long Term Insurance Policy. Several provide discounts for those who do not use tobacco products and are quite healthiest. Some companies provide that the policy of the existing spouse is ‘paid-up’ when the first spouse dies - no further insurance premium payments are required. A qualified agent could help you in reviewing the options available.

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