Long-Term Care Insurance (LTC) - Section 17 - Quiz

The purpose of the Long-Term Care Insurance Personal Worksheet is primarily to determine

whether an applicant's purchase of LTC insurance meets the insurer's suitability standards

An agent replaces a long-term care insurance policy for one of her clients. The new policy materially improves the insured's benefits, but the annual premium increases from $2,500 to $3,500. The replacing insurer may pay the agent the full first-year commission rate on what amount?

$1000

Which is not a reason for someone to buy a long-term care policy?

40 percent of people will be in a nursing before they're eligible for Medicare (Hint: between the ages of 18-64)

Long-term care services are typically divided into four categories except:

Adult hospital care (Hint: Long-Term Care 1) In-home health care 2) Adult day care 3) Assisted living care 4) Nursing home care)

Which of the following would not be a common LTC exclusion?

Alzheimer illness

Which of the following is not a non-forfeiture provision for LTC?

Annual Renewable Term

Which of the following statements is correct?

Annuities do not pass tax-exempt however life insurance does

Once the elimination period in a long term care policy has been met which of the following periods would begin?

Benefit period (Benefit period is the length of time that a policy will pay benefits)

Under what law or laws would qualified long term care policies receive special tax treatment?

Both California and Federal Law (Hint: Both California and Federal law give favorable tax treatment to qualified long-term care policies regarding the taxation of benefits and deductibility of premiums)

Which one of the following would not be a trigger of benefit under a LTC policy?

Driving (Unable to perform two or more of the activities of daily living (ADL) without continual assistance; Ambulating, Bathing, Continence, Transferring, Dressing, Eating, Toileting)

All of the following are ways to issue LTC contracts except:

Endorsement/Rider to the Medicare supplement

Long term care policies must contain which of the following provisions?

Guaranteed renewability (Hint: HIPPA requires that all Long Term Care and Medicare supplement policies must be issued with a renewable provision no less than guaranteed renewable)

In California, which program provides free counseling to individuals and families about long term care. Medicare and other health care issues and programs available for seniors?

HICAP (they even provide legal assistance with claims, all of these services are free)

All of the following are true about HICAP except:

HICAP providers information and counseling solely about the Medicare program (Hint: HICAP provides information, counseling and assistance to consumers regarding the Medicare program supplemental (Medigap) insurance, long-term care insurance and other health insurance issues)

HICAP stands for:

Health Insurance Counseling Advocacy Program

Formal care delivered in the home that is designed to provide custodial care and assistance with activities of daily living would be considered which type of care?

Home care (Hint: Home care refers to services that can be provided in the home. Home care is not medical care, instead it involves custodial care which is personal care and assistance with activities such as cooking, house cleaning grooming, etc)

Each of the following benefits are available with a LTC policy except:

In-Patient Hospice Care

What is the definition of inflation protection with a LTC policy?

Insurers offer policyholders the option to increase benefits without evidence of insurability

Which of the following statements best describes a nursing home?

It provides professional health-care services around the clock in the most cost-efficient manner

Insurers must offer inflation protection for all of the following types of LTC policies except:

Life insurance policies with LTC riders

Most long term care expenses are paid by:

Medicaid (Medi-Cal) (Hint: Medi-Cal is the program that pays most of the long term expenses once a person's assets have been exhausted. Besides Medi-Cal most of long term care expenses are paid by individuals and their families)

Most LTC policies are known as all the following except:

Medical Triggers (Hint: Most LTC policies are known as indemnity or expense incurred policies. An indemnity or per dem policy pays up to a fixed benefit amount regardless of what you spend)

HICAP provides all of the following except:

Medicare financial assistance

Which category of LTC services provides the highest level of service?

Nursing Home Care (custodial, intermediate and skilled)

Asset protection under Medi-Cal is a feature of which of the following types of long-term care policies?

Partnership policies only

Policy premiums vary according to each of the following except:

Past health conditions

Long term care is especially needed when an elderly person requires assistance with activities of daily living due to:

Physical or cognitive impairments

Attempting to void a long-term care policy after a claim has been made rather than eliminating applicants in the underwriting process is the illegal practice of known as:

Post-selection underwriting or Pos-Claim underwriting (Hint: In California all underwriting concerns must be addressed prior to policy issuance not after)

LTC Non-forfeiture provisions can apply based on all of the following except:

Reduced Benefits Non-forteiture 1) Cash surrender value (this would guarantee an amount to be paid to the policyholder if the policy lapses or is surrendered 2) Reduced Paid-up (This result in a reduced amount of daily benefits with no further premium payments required) 3) Extended Term (This would give full benefits to the insured for a certain amount of time after the premium payments end)

Which of the following statements about qualified long-term care insurance policies is FALSE?

The benefit triggers under qualified long-term care policies are the same as under nonqualified policies

Which of the following is NOT a requirement of a tax-qualified, long-term care policy?

The insured's physical impairment must be expected to last at least 30 days for benefits to be paid

California Partnership for Long-term Care policies does all the following except:

The insurer may deduct paid out benefits from their state income tax (Hint: The customer may deduct premiums if they itemize their deductions and their medical expenses exceed 7.5% of adjusted gross income. This is known as tax qualified)

Who would be the most likely candidate for purchasing a LTC policy?

Those who have the resources to pay the premiums

Which of the following is not one of the three general classes of long-term care policies that may be sold in California?

adult day care only (Hint: Adult day care is provided under Home and community based care)

When an agent solicits a sale of long-term care insurance, the outline of coverage must be delivered to the applicant

before the presentation of an application or enrollment form

Qualified long-term insurance policies are entitled to a special tax advantages under

both federal law and California law

A person who is NOT self-employed may deduct the premiums for qualified long-term care insurance as a medical expense

only if the person itemizes deductions, and the person's deductible medical expenses exceed 10% of adjusted gross income, seniors 7.5% until 2016

Which of the following would not be considered an ADL or a trigger for LTC benefits?

person cannot walk and can only get around in a wheel chair

The most important benefit of the California Partnership Program is:

the insured can apply for Medicaid benefits (even though they haven't sold and used their assets)