Unit 21 - Long Term Care

What protects an insured against unintentional lapse?

ANOTHER INDIVIDUAL ALSO RECEIVES THE PREMIUM DUE NOTICE The insurer must be given the name of another individual to whom a premium notice will be sent if the policy enters its grace period.

What is the definition of pre-existing condition in a long-term care policy?

A CONDITION FOR WHICH ADVICE OR TREATMENT WAS RECEIVED WITHIN 6 MONTHS BEFORE THE EFFECTIVE DATE OF COVERAGE. A condition is considered to be pre-existing if advice or treatment was received from a health care provider within 6 months before the effective date of coverage.

Long-term care policies can limit or exclude coverage for all of the following EXCEPT

A FAMILY HISTORY OF A HEART CONDITION Long-term care policies cannot exclude or limit coverage by type of illness, treatment, medical condition, or accident. They exclude war or acts of war, alcohol or drug abuse, self-inflicted injuries, treatment provided at no cost to the insured (IE veteran's hospital), and mental illness and nervous disorders for which there is no demonstrable organic cause. Dementia, Alzheimer's disease and other organic-based mental illnesses are covered.

Regarding long-term care insurance, the existence of symptoms that would cause an ordinarily prudent person to seek diagnosis or treatment, or a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 months before the effective date of an insured's coverage, is known as

A PRE-EXISTING CONDITION The most restrictive definition allowed for a pre-existing condition in long-term care insurance is the existence of symptoms that would cause an ordinarily prudent person to seek diagnosis or treatment, or a condition for which medical advice or treatment was recommended by or received from a provider of health care services within 6 months preceding the effective date of an insured's coverage.

For a long-term care insurance policy to begin paying benefits, the insured must

BE DIAGNOSED AS CHRONICALLY ILL As a result of the Health Insurance Portability and Accountability Act of 1996, prior hospitalization can no longer be used as a benefit trigger fro long-term care policies. Instead, the individual must be diagnosed as chronically ill. A diagnosis fo chronic illness can be made on 2 levels: physical and cognitive. The illness must be expected to last a minimum of 90 days.

Which of the following sets the requirements that must be met for long-term care insurance policies to be considered "Qualified"?

HIPAA The Health Insurance Portability and Accountability Act of 1996 (HIPAA) spells out specific requirements that must be met in order to be considered "Qualified" and take advantage of income tax benefits.

In terms of long-term care, which of the following WOULD be covered by a Medicare supplement insurance plan?

HOSPICE CARE Medicare supplement insurance will cover hospice care if the insured has a terminal illness and is not expected to live more than six months. Grief counseling would not be covered. Custodial care, assisted living and adult day care are benefits that may be covered under a long-term care insurance policy.

To be considered qualified, a long-term care insurance policy must conform to requirements concerning all of the following EXCEPT

PREMIUM CHARGES To be considered a qualified contract, a long-term care insurance policy must follow NAIC's long-term care insurance model regulations, which address the following: policy replacement, conversion, marketing standards, prohibitions on limits and exclusions, and policy renewability, among other things. These regulations do not address premium charges.

Which of the following statements regarding the required provisions in a long-term care policy is NOT true?

PRIOR HOSPITALIZATION IS REQUIRED FOR PAYMENTS OF BENEFITS Long-term insurance policies do not require prior hospitalization as a condition to pay benefits.

Which of the following statements explains why a person would NOT be a good applicant for a long-term care insurance policy?

BECAUSE OF HIS FINANCIAL SITUATION, HE MUST RELY ON MEDICAID TO PAY THE COST OF LONG-TERM CARE. If a person is destitute, Medicaid will pay the cost of a long-term care. Because the cost of long-term care can be high, often as much as $50,000 or more a year, even a large savings is not a guarantee of continued care. Medicare supplement policies do not pay LTC costs, nor do disability policies.

Which of the following statements regarding the elimination period in a long-term care policy is NOT true?

THE LONGER THE ELIMINATION PERIOD, THE HIGHER THE PREMIUM To make the policy premium more affordable, the insured may select a longer elimination period. This period acts as a time deductible: care must be received for a specified number of days before the benefits begin to pay for the expenses.

Which of the following is a common benefit trigger for a long-term care policy?

COGNITIVE OR MENTAL IMPARIMENT A benefit trigger is an event or condition that must occur before policy benefits become payable. Diagnosis of chronic illness is a benefit trigger and can be based on 2 conditions: physical or cognitive illness. The physical diagnosis of a chronically ill individual is one who has been certified as being unable to perform at least 2 activities of daily living (ADLs), which are eating, toileting, transferring (getting out of bed), bathing, dressing, and continence. An individual would also be considered chronically ill if he requires substantial supervision to protect his health or safety because of severe cognitive impairment.

The minimum benefit period for a long-erm care insurance policy is

12 MONTHS Long-term care insurance policies provide coverage for at least 12 months.

All of the following are required long-term care insurance standards EXCEPT

A 10-DAY FREE-LOOK PERIOD The required free-look period for a long-term care insurance policy is 30 days. All of the other statements are marketing standards.

Long-term care policies can limit or exclude coverage for all of the following EXCEPT

A FAMILY HISTORY OF A HEART CONDITION Long-term care policies cannot exclude or limit coverage by types of illness, treatment, medical condition, or accident. They exclude war or acts of war, alcohol or drug abuse, self-inflicted injuries, treatment provided at no cost to eh insured (IE veterans hospital), and mental illness and nervous disorders for which there is no demonstrable organic cause. Dementia, Alzheimer's disease and other organic-based mental illnesses are covered.

For a long-term care insurance policy to begin paying benefits, the insured must

BE DIAGNOSED AS CHRONICALLY ILL As a result fo the Health Insurance Portability and Accountability Act of 1996, prior hospitalization can no longer be used ass a benefit trigger for long-term care policies. Instead, the individual must be diagnosed as chronically ill. A diagnosis of chronic illness can be made on 2 levels: physical and cognitive. The illness must be expected to last a minimum of 90 days.

Which of the following statements explains why a person would NOT be a good applicant for a long-term care insurance policy?

BECAUSE OF HIS FINANCIAL SITUATION, HE MSUT RELY ON MEDICAID TO PAY THE CSOT OF LONG-TERM CARE If a person is destitute, Medicaid will pay the cost of long-term care. Because the cost of long-term care can be high, often as much as $50,000 or more a year, even a large savings is not a guarantee of continued care. Medicare supplement policies do not pay LTC costs, nor do disability policies.

MAG Trading Co. established a tax-qualified, long-term care insurance plan for its employees. Which of the following statements is NOT correct?

BENEFITS RECEIVED FORM THE PLAN ARE SUBJECT TO INCOME TAX If MAG Trading Co. establishes a tax-qualified, long-term care insurance plan for its employees, any premiums it pays are excludable from the employees' incomes. In addition, MAG Trading can take a tax deduction for the premiums paid, which are considered a necessary business expense for tax purposes. Amounts received under the plan are excluded form income as amounts received for personal injuries and sickness.

Which of the following provisions gives a long-term care policyowner the option to purchase additional insurance amounts within specified parameters regardless of insurability?

GUARANTEE OF INSURABILITY A guarantee of insurability provision provides a long-term care insurance policyowner with the option to purchase additional insurance amounts within specified parameters regardless of insurability, claims history, or existing conditions. This is an optional benefit available to policyowners.

Which of the following provisions gives a long-term care policy owner the option to purchase additional insurance amounts within specified parameters regardless of insurability?

GUARANTEE OF INSURABILITY. A guarantee of insurability provision provides a long-term care insurance policyowner with the option to purchase additional insurance amounts within specified parameters regardless fo insurability, claims history, or existing conditions. This is an optional benefit available to policy owners.

Care that is provided on an intermittent basis by licensed nurses is known as

INTERMEDIATE CARE There are 3 levels of long-term care. Skilled nursing care is provided on a 24-hour basis, 7 days per week and many only be performed by licensed nurses under a doctor's orders. Intermediate care is intermittent care and is also provided by licensed nurses under a doctor's orders; however, care is provided fewer than 7 days a week or less than 8 hours per day. Custodial care may be provided by someone without medical training who is hired to help the insured in performing ADLs.

If a long-term care policy is considered tax qualified,

ITS BENEFITS WILL QUALIFY FOR TAX-EXEMPT TREATMENT Benefits payable under long-term care policies are not taxable to the insured, provided the policy is considered tax qualified. This means that the policy's provisions must conform to certain standards and guidelines set forth by the Internal Revenue Code and the Health Insurance Portability and Accountability Act fo 1996 (HIPAA).

Which of the following types of care is described as a broad range of medical, personal, and environmental services designed to assist individuals who have lost their ability to remain completely independent in the community?

LONG-TERM CARE Long-term care (LTC) refers to care provided for an extended period of time, normally more than 90 days. Depending on the severity fo the impairment, assistance may be given at home, at an adult care center, or in a nursing home.

State long-term care insurance partnership programs are a joint effort of all of the following EXCEPT

MEDICARE To encourage more individuals to purchase long-term care insurance, qualified state long-term care partnership programs were created as a joint effort of commercial insurers, the state's insurance department, and the state Medicaid agency.

State long-term care insurance partnership programs are a joint effort of all the following EXCEPT

MEDICARE To encourage more individuals to purchase long-term care insurance, qualified state long-term care partnership programs were created as a joint effort of commercial insurers, the states' insurance department, and the state Medicaid agency.

Which of the following statements regarding home health care is NOT correct?

MOST LONG-TERM CARE POLICIES DO NOT PROVIDE COVERAGE FOR HOME HELATH CARE As an alternative to nursing home care, most long-term care policies now provide coverage for home health care. Home health care is an extension of intermediate custodial care and provides coverage for insureds who need some type of health care, but are generally able to function without the need to be confined to a nursing home. Physical therapy and some custodial care, such as meal preparation, are services that home health care might provide.

Which of the following statements regarding home health care is NOT correct?

MOST LONG-TERM CARE POLICIES DOE NOT PROVIDE COVERAGE FOR HOME HEALTH CARE. As an alternative to nursing home care, most long-term care policies now provide coverage for home health care. home health care is an extension of intermediate custodial care and provides coverage for insureds who need some type of health care, but are generally able to function without the need to be confined to a nursing home. Physical therapy and some custodial care, such as meal preparation, are services that home health care might provide.

Which of the following is an optional benefit to a long-term care insurance policy?

NONFORFEITURE BENEFIT Nonforfeiture benefits are one of the optional benefits that may be added to a long-term care insurance policy This benefit provides for either a growth in cash value or for a guaranteed return of some stated percentage of premium, minus any paid benefits if the policy is lapsed or surrendered.