"Inflation protection" refers to measures or strategies that help protect the value of money against rising prices over time. It is a way to safeguard your money's purchasing power so that it doesn't lose its value due to inflation.
Full definition
It's also important to know that several carriers allow
for inflation protection while also meeting the standards above.
This
provides inflation protection for investors as while they may be paying more for bread at the grocery store, they should also be receiving larger dividend payments to offset this cost.
It is really important to remember that inflation protected bonds have significantly lower returns and one form
of inflation protection is to just have more money in the future.
Some policies
offer inflation protection policies that can help keep your premiums low even when the cost of long term care increases.
Enjoy
inflation protection by increasing rent for inflation annually when leases expire or adding annual increases into your rental agreements.
Though the problem with
getting inflation protection with crude oil futures is that market participants need to pay storage costs, reflected through the roll yield when there is excess inventory.
And, as my colleagues stress in a recent paper, it can make sense for some investors to
buy inflation protection before they actually need it.
However, when thinking of long - term investing, it is important not to miss the forest for the trees and remember the asset class is providing diversification and
inflation protection through time.
While there is a clear relationship between commodity index returns and inflation changes, what is even more interesting is how
much inflation protection the commodity indices provide.
It has been claimed that the value of extras (
like inflation protection and guarantee periods) doesn't justify their price, but without insider information it is impossible to judge.
On top of that, workers will receive a $ 6000 settlement bonus and $ 7000 in
inflation protection over the course of the agreement.
And, as my colleagues stress in a recent paper, it can make sense for some investors to buy
inflation protection before they actually need it.
Regardless of
whether inflation protection is part of a policy or an endorsement, homeowners insurance policies should be reviewed annually.
Combined with a conventional equity portfolio, which eventually provides
inflation protection albeit often with a lengthy lag, the short bonds provide spending money and capital in the short to near term.
The equity holdings in the taxable and retirement accounts should provide their
own inflation protection probably 2 - 3 times over because we don't withdraw any principal early on.
Inflation protection means that instead of your rates increasing over time, your insurance company estimates the projected cost of inflation and then averages that out into a specific number of payments.
Whole life insurance is by definition a long - term purchase and the guaranteed return on this type of policy provides
little inflation protection.
For retirement, most people look at a fixed lifetime income annuity
with inflation protection — covering both your and your spouse's lives.