Inflation Protection Coverage
Understanding the Benefits of Inflation Protection Coverage for Financial Security.
Inflation Protection Coverage is a type of insurance that helps protect the value of your money over time. It is specifically designed to account for the impact of inflation on your coverage amount. Inflation refers to the increase in prices of goods and services over time, which means that the same amount of money will buy fewer things in the future. With Inflation Protection Coverage, the coverage amount of your insurance policy is adjusted periodically to keep up with inflation. This ensures that you will have adequate coverage to meet your financial needs, even as the cost of living increases. For example, let’s say you have a life insurance policy with a coverage amount of $500,000. If inflation is 3% per year, the value of that coverage amount will decrease over time. In 10 years, the purchasing power of $500,000 will be reduced to around $402,000. However, if you have Inflation Protection Coverage, your coverage amount would be automatically increased each year to keep up with inflation. This means that after 10 years, your coverage amount would still be able to provide the same level of financial protection as it did when you initially purchased the policy. Inflation Protection Coverage can be a valuable feature to consider when choosing an insurance policy, especially if you want to ensure that your coverage amount will keep pace with the rising cost of living.
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