What is the purpose of inflation protection in long-term care policies?

The purpose of inflation protection in long-term care policies is to ensure that benefit amounts keep pace with inflation. As the cost of healthcare services rises over time due to inflation, inflation protection helps to maintain the purchasing power of the benefits provided by the policy. This means that if a policyholder requires long-term care in the future, their benefits will be sufficient to cover the escalating costs associated with those services.

Without inflation protection, the value of the benefit amounts could diminish significantly over the years, leaving policyholders underinsured when they actually need care. By incorporating this feature, insurers help policyholders avoid the risk of being inadequately covered as the prices of long-term care rise, ensuring that they can access the care they need without facing financial hardship.