What inflation protection is available to a 59-year-old purchasing a long-term care partnership policy?

When it comes to long-term care partnership policies, particularly for individuals purchasing such policies at the age of 59, the most suitable inflation protection is Compound Annual Inflation Protection. This type of protection is designed to help ensure that the benefits will keep pace with rising costs over time, providing a more reliable safeguard against inflation.

Compound Annual Inflation Protection works by increasing the policy benefits each year based on a set percentage. This compounding effect means that not only does the principal amount increase, but the increases themselves also accrue further increases in future years. This is especially important for long-term care needs, which can be significantly affected by inflation over the course of several decades.

While Fixed Inflation Protection provides a set benefit amount that does not change, and Simple Annual Inflation Protection increments the benefit without compounding, Compound Annual Inflation Protection is more beneficial for a 59-year-old looking to ensure that their coverage will be adequate in the future. Variable Inflation Protection, on the other hand, may adjust based on market performance, which can introduce uncertainty and risk that may not be ideal when planning long-term care needs.