State RegulationsMI specificDifficulty 1/5
Under Michigan law, when an insurer offers inflation protection with a long-term care policy, the offer must include an option that is no less favorable than:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Michigan's inflation protection rule (M.C.L. 500.3909, within the long-term care chapter at M.C.L. 500.3901 to 500.3955) requires the insurer to offer an option no less favorable than annual compounding increases of at least 5%. The point is to confront benefit erosion: a level daily benefit buys far less care years later, and the statute ensures every applicant is offered a meaningful way to keep pace with rising long-term care costs.
Why the other options are wrong
- A) A permanently fixed benefit is the opposite of inflation protection and cannot satisfy the required offer.
- B) Conditioning increases on new evidence of insurability defeats the purpose; the required menu includes increase rights without insurability evidence.
- D) Limiting increases to nursing facility stays is not among the qualifying structures and leaves out home and community-based claims.
Memory hook
Michigan's floor for inflation offers: 5%, compounding, every year.