Long-Term Care Series
LTC · Design Choices
The Two Design Decisions
That Matter Most
An LTC policy isn't one thing — it's a set of choices. The two that matter most: inflation protection (whether your benefit grows with care costs) and benefit period (how long the coverage lasts). Get either wrong and the policy may not be there when you need it.
The inflation rider choice
Both compound annually. Over 25 years, 3% doubles your benefit. 5% triples it. Premium difference is significant — but so is the gap between a $500K benefit and a $700K+ benefit when you need it.
Inflation protection options
No inflation rider
Cheapest premium today. Benefit stays flat for life. By the time you need it, $200/day might cover 2 hours instead of a full day. Risky for anyone under 70.
Simple inflation (3% or 5%)
Benefit grows by a fixed percent of the ORIGINAL benefit annually. Linear growth. Cheaper than compound.
Compound inflation (3% or 5%)
Benefit grows by the percent of the CURRENT benefit annually. Exponential growth. The recommended choice for buyers under 65. Doubles or triples the benefit over time.
CPI / Custom inflation
Benefit tracks Consumer Price Index. Less predictable, but matches real-world cost inflation more closely.
Benefit period choices
2 years
Cheapest premium. Covers the average claim length (~2.5 years for women, ~1.5 for men). Risky if you have family history of long care episodes.
3-5 years
Sweet spot for most buyers. Covers above-average claim lengths. Premium reasonable.
Lifetime / Unlimited
No cap on benefit. Most expensive — and increasingly rare. Few carriers still offer this. Best for those with family history of dementia.
Shared (couples)
A combined pool of benefit years between spouses. If one needs less, the other can draw more. Often the most efficient design for couples.
Design your policy for your situation
We'll quote multiple inflation + benefit-period combinations side by side so you see the trade-offs in dollars.
Keep Reading