Which feature protects long-term care policy values from inflation over time?

• A. Inflation protection
• B. Return of premium
• C. Cash value
• D. Waiver of premium

Answer: (C)

Inflation protection is designed to guard long-term care benefits against rising costs over time. The amount paid for care tends to increase due to inflation, so a fixed benefit can quickly lose real value. An inflation protection feature adds automatic increases to the benefit—often annually—by a set percentage or in step with an inflation index. This keeps the daily or monthly benefit able to cover actual care costs decades into the policy. Some plans offer simple increases, others compound them, and caps may apply. Without this protection, the purchasing power of the benefit diminishes as costs rise.

Return of premium would refund premiums paid if you cancel, but it doesn’t adjust benefits for inflation. Cash value exists in some life insurance–based or hybrid policies and represents accumulated cash, not a mechanism to maintain LTC benefit purchasing power. Waiver of premium simply stops premiums during disability and doesn’t change benefit amounts.