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Relationship of Cost of Care and Benefits
Graphs for Comparing Inflation Options for ISSUE AGE 55
The two graphs on this page illustrate the monthly premium and the Daily Benefit Amount over time under the Automatic Compound Inflation Option (ACIO) and the Future Purchase Option (FPO). The graphs assume a Comprehensive plan, with an initial Daily Benefit Amount of $150, a 90 Day Waiting Period, and a 5 Year Benefit Period. The graphs below only illustrate the first 25 years of premium and benefits.
As you can see from the first graph, your ACIO premium does not increase as the benefit increases.With FPO, your premium starts out lower than with ACIO. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACIO premium. Since the FPO premium increases steeply during normal retirement ages, you should consider whether you will be able to afford the higher premium under the FPO. At the time you begin to decline premium increases, your coverage doesn’t end, it just stops increasing.
The second graph shows how your Daily Benefit Amount increases over time under ACIO and how it increases under FPO if you do not decline the benefit increases and they take effect. However, if you decline the benefit increases, your FPO benefit will not increase and becomes substantially less than the ACIO benefit.
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