Under California's Long-Term Care Insurance Reform Act, what inflation protection must an insurer offer (but not necessarily mandate) to applicants for an individual LTC policy?
Explanation
California Insurance Code §10232.9 requires LTC insurers to OFFER each applicant inflation protection, with at minimum a 5% compounded annual benefit increase option (the gold standard for keeping pace with nursing-home cost inflation over a 20-30 year horizon). The applicant may elect a lower form (simple 5%, lower percentages, or none) but must be offered the strongest version. Option A — simple 2% is too weak to be a sole offering. Option B — California is among the strictest LTC states; offering inflation protection is mandatory even though purchase is optional. Option C — California does not limit by applicant age. The 5%-compound default reflects the historical rate of LTC cost growth and is required for Partnership LTC qualification.
Law Reference: Cal. Ins. Code §10232.9 (LTC inflation protection)Practice all 315 questions free — no signup required.
Related questions on this topic
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