C.21 Long-term insurance and long-term case planning (individual and group)

Question 1

Which of the following is NOT a typical feature of long-term care insurance?

A. Benefit period
B. Elimination period
C. Inflation protection
D. Guaranteed issue

Answer 1

D. Guaranteed issue

Long-term care insurance is typically underwritten, meaning that an applicant’s health history and current health status are taken into account before the policy is issued.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 2

Which of the following is a benefit of purchasing long-term care insurance at a younger age?

A. Lower premiums
B. Longer benefit period
C. Higher daily benefit amount
D. All of the above

Answer 2

D. All of the above

Purchasing long-term care insurance at a younger age can result in lower premiums, a longer benefit period, and a higher daily benefit amount.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 3

James Patterson, a 58-year-old graphic designer, is considering purchasing a long-term care insurance policy. He has read through the policy details and noticed that there is a 90-day elimination period clause. James is uncertain what this elimination period entails and how it could affect his potential benefits. As his financial advisor, how would you explain the purpose of the elimination period to James?

A. It serves to prevent coverage for any pre-existing conditions he may have.
B. It is intended to preclude coverage for any short-term care needs he might encounter.
C. It is designed to remove the policy’s coverage for long-term care needs altogether.
D. It establishes a predetermined duration he must wait before the insurance benefits begin to pay for his long-term care expenses.

Answer 3

D. It establishes a predetermined duration he must wait before the insurance benefits begin to pay for his long-term care expenses.

The elimination period in long-term care insurance is akin to a deductible period in other types of insurance. This is the amount of time that must pass before the insurance company starts to pay out benefits. It is a waiting period that begins when a person becomes eligible for benefits (e.g., they require assistance with daily living activities) and lasts for a predetermined length of time chosen at the purchase of the policy. During this period, the insured must cover their own long-term care costs. This feature of long-term care insurance helps to lower premiums by eliminating coverage for short-term care that the insured may be able to afford without insurance, and it also helps to prevent fraudulent claims.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 4

Margaret is a 62-year-old retiree considering her options for long-term care insurance. She is evaluating a traditional long-term care policy, which offers comprehensive coverage at a daily benefit of $250, but no benefits if care is not needed. Her financial advisor also presents her with a hybrid long-term care policy that combines life insurance with long-term care coverage. The hybrid policy has a death benefit of $150,000 and also includes a long-term care benefit. Margaret is healthy now but wants to plan for her future with an understanding of the advantages each policy provides.

Which of the following best describes the primary advantage of the hybrid long-term care insurance policy that Margaret’s financial advisor has presented to her?

A. It provides a death benefit if long-term care is not needed.
B. It provides a higher daily benefit amount than traditional long-term care insurance.
C. It does not require underwriting.
D. It covers all long-term care needs without limitations.

Answer 4

A. It provides a death benefit if long-term care is not needed.

The primary advantage of a hybrid long-term care insurance policy over traditional long-term care insurance is that it offers a death benefit if the long-term care component is never used. This means that if Margaret purchases the hybrid policy and never requires long-term care, her beneficiaries will still receive a benefit from the policy upon her death. This feature can provide peace of mind to policyholders who are concerned about the possibility of paying premiums for long-term care insurance that may never be utilized. Options B, C, and D are not intrinsic advantages of hybrid policies over traditional long-term care insurance. Hybrid policies generally do require underwriting, and they do not necessarily provide higher daily benefits or cover all long-term care needs without limitations.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 5

Which of the following is NOT a type of long-term care insurance policy?

A. Individual policy
B. Group policy
C. Medicare policy
D. Partnership policy

Answer 5

C. Medicare policy

Medicare does not offer long-term care insurance. It may cover some long-term care costs, but only under certain circumstances and for a limited time period.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 6

Jane is considering purchasing a long-term care insurance policy. Which of the following factors should she consider when choosing a policy?

A. Her current health status
B. Her age
C. Her budget
D. All of the above

Answer 6

D. All of the above

C.21 Long-term insurance and long-term case planning (individual and group)

Question 7

Tom is in his early 60s and has a history of heart disease. He is interested in purchasing a long-term care insurance policy but is concerned that his health history will result in high premiums. Which of the following options might be a good fit for Tom?

A. Traditional long-term care insurance
B. Hybrid long-term care insurance
C. Short-term care insurance
D. Medicaid

Answer 7

B. Hybrid long-term care insurance.

Hybrid policies may be a good fit for individuals with health issues because they typically do not require underwriting and may offer lower premiums than traditional long-term care insurance.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 8

Kelly’s mother has recently been diagnosed with Alzheimer’s disease and Kelly is considering purchasing a long-term care insurance policy for her mother. Which of the following factors should Kelly consider when choosing a policy?

A. Her mother’s age
B. Her mother’s health status
C. The policy’s benefit period
D. All of the above

Answer 8

D. All of the above

C.21 Long-term insurance and long-term case planning (individual and group)

Question 9

Mark is concerned about the impact of inflation on his long-term care expenses. Which of the following features should he look for in a long-term care insurance policy to address this concern?

A. Guaranteed issue
B. Benefit period
C. Elimination period
D. Inflation protection

Answer 9

D. Inflation protection

Inflation protection is a feature of long-term care insurance that helps to address the impact of inflation on the cost of care by adjusting the policy’s benefits to keep pace with the rising cost of care.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 10

Which of the following is a limitation of long-term care insurance policies?

A. They typically cover all long-term care needs without limitations
B. They may not cover certain conditions or types of care
C. They are always more expensive than other types of insurance
D. They are not tax-deductible

Answer 10

B. They may not cover certain conditions or types of care

Long-term care insurance policies may exclude coverage for certain conditions or types of care, such as care provided by a family member or care received outside the United States.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 11

Which of the following is a potential disadvantage of self-insuring for long-term care expenses?

A. The cost of care may exceed the amount saved
B. Self-insuring does not provide any tax benefits
C. Self-insuring may require liquidating assets
D. All of the above

Answer 11

D. All of the above

Self-insuring for long-term care expenses may be a disadvantage because the cost of care may exceed the amount saved, self-insuring does not provide any tax benefits, and self-insuring may require liquidating assets.

C.21 Long-term insurance and long-term case planning (individual and group)

Question 12

Which of the following is a potential advantage of a long-term care insurance partnership policy?

A. It provides a higher daily benefit amount than traditional long-term care insurance
B. It allows policyholders to keep more assets if they need to apply for Medicaid
C. It does not require underwriting
D. It covers all long-term care needs without limitations

Answer 12

B. It allows policyholders to keep more assets if they need to apply for Medicaid

C.21 Long-term insurance and long-term case planning (individual and group)

Question 13

Susan is considering a long-term care insurance policy with a 90-day elimination period. Which of the following statements is true?

A. Susan will not receive any benefits for the first 90 days of a covered condition
B. Susan will receive benefits immediately after a covered condition begins
C. Susan will only receive benefits for the first 90 days of a covered condition
D. Susan will receive benefits for the entire duration of a covered condition, but they will be reduced during the first 90 days

Answer 13

A. Susan will not receive any benefits for the first 90 days of a covered condition

C.21 Long-term insurance and long-term case planning (individual and group)

Question 14

Which of the following is a potential disadvantage of a hybrid long-term care insurance policy?

A. It may be more expensive than traditional long-term care insurance
B. It does not provide a death benefit if long-term care is not needed
C. It requires underwriting
D. It does not offer any tax benefits

Answer 14

A. It may be more expensive than traditional long-term care insurance

C.21 Long-term insurance and long-term case planning (individual and group)

Question 15

Which of the following is a potential advantage of a life insurance policy with a Long-Term Care (LTC) rider?

A. It provides a death benefit if long-term care is not needed
B. It does not require underwriting
C. It does not have a maximum benefit period
D. It covers all long-term care needs without limitations

Answer 15

A. It provides a death benefit if long-term care is not needed

C.21 Long-term insurance and long-term case planning (individual and group)

Question 16

Which of the following statements is true about Long-Term Care (LTC) insurance premiums?

A. Premiums are generally tax-deductible for individuals as a medical expense.
B. Premiums vary based on the age of enrollment but are not affected by the health status of the applicant.
C. LTC insurance premiums are uniformly priced regardless of the insurance provider.
D. Premiums decrease as the individual ages.

Answer 16

A. Premiums are generally tax-deductible for individuals as a medical expense.

LTC insurance premiums can often be itemized as medical expenses on tax returns, depending on the total medical expenses and the taxpayer’s adjusted gross income.

Question 17

What is typically NOT covered by group long-term care insurance offered by an employer?

A. Nursing home care
B. Home health care
C. Cosmetic surgery
D. Adult day care services

Answer 17

C. Cosmetic surgery

Group long-term care insurance generally covers services like nursing home care, home health care, and adult day care, which are essential for individuals who need assistance with daily living activities due to chronic illnesses or disability.

Question 18

Which feature of Long-Term Care policies is most likely to increase the premium?

A. Shorter elimination period
B. Reduced benefit period
C. Limited choice of care providers
D. Annual benefit cap

Answer 18

A. Shorter elimination period

The elimination period in a Long-Term Care policy acts like a deductible in terms of time. A shorter elimination period means the insurance company begins paying out benefits sooner, which increases the risk for the insurer and thus increases the premium.

Question 19

An individual is purchasing a Long-Term Care insurance policy. Which factor would likely contribute to a higher cost of the policy?

A. The policy includes inflation protection.
B. The individual is in excellent health.
C. The policy excludes coverage for pre-existing conditions.
D. The individual chooses a longer elimination period.

Answer 19

A. The policy includes inflation protection.

nflation protection is a feature that increases the benefit amount annually to keep pace with inflation, which can significantly raise the cost of a policy.

Question 20

What is the primary purpose of a “Partnership Qualified” Long-Term Care policy?

A. To allow for the sharing of benefits between spouses.
B. To provide additional tax incentives.
C. To enable individuals to protect assets while qualifying for Medicaid.
D. To guarantee acceptance without medical underwriting.

Answer 20

C. To enable individuals to protect assets while qualifying for Medicaid.

Partnership Qualified policies are part of a program between state governments and private insurers designed to help individuals protect a portion of their assets equal to the benefits paid by the LTC policy, should they eventually require Medicaid assistance for long-term care. This feature helps in asset protection while still allowing individuals to qualify for Medicaid under certain conditions.