ACIO= "Automatic Compond Inflation Option" : A fixed monthly premium, does not go up in time. In effect, you pay higher premiums in the early years to account for inflation.
FPO= "Future Purchase Option": Every two years you get the option to increase coverage to keep up with inflation. However, as you get older, te premiums escalate much faster than inflation, since you're buying additional coverage on an older person. If you don't buy more coverage, of course, the benefit gets degraded fairly rapidly by inflation
Examples from "Book 1 - Program Details & Rates, FLTCIP"(the numbers below are from graph, so they aren't precise). Coverage purchased at age 45.
Benefit: $150 per day max, 90 day waiting period, 5 year benefit period
Age Premium ACIO FPO (al increases accepted to keep up with inflaton)
45 $ 80 $ 30
50 $ 80 $ 40
55 $ 80 $ 60
60 $ 80 $ 75
65 $ 80 $ 140
70 $ 80 $ 200
75 $ 80 $ 450
(That's where the graph stops--I think it gets too scary after that. Based on the other charts, it appears that the FPO premiums go up aprox 300% between age 75 to 85, so the monthly
premiums would be in the ballpark of $1500.)
I think few folks will be in a position to pay the skyrocketing FPO rates when they get older, so they'll either drop the coverage entirely or stop buying the inflation increases, leading to diminishing coverage.
For us (age: mid-40s) the level ACIO option looks best. But it is certainly not cheap, so I won't be buying any more than necessary, and there'll be some belt-tightening necessary if someone does end up in LTC. Motivation for buying the policies is to relieve the non-afflicted spouse and our daughter from bearing the financial costs of an incapacitated spouse/parent.
Nords was also considering a policy by a company called "Glock"--much lower cost and no uncertainty about the ability of the company to follow-through on promised coverage.