Section 17 (Long-Term Care Insurance: LTC)

Long-term care services are typically divided into four categories except: A. Adult hospital care B. Nursing home care C. In home health care D. Assisted living care

A. Adult hospital care Long-term care services are typically divided into four categories: 1) In-home health care 2) Adult day care 3) Assisted living care 4) Nursing home care

Which of the following is not one of the three general classes of long-term care policies that may be sold in California? A. Home care and community based only B. Comprehensive long-term care C. Nursing facility and residential care facility only D. Adult day care only

D. Adult day care only Adult day care is provided under Home and community based care

Long term care policies must contain which of the following provisions? A. Guaranteed renewability B. Restoration of benefits provision C. Assisted living at 50% of facility care benefit D. One time elimination period

A. Guaranteed renewability HIPAA requires that all Long Term Care and Medicare supplement policies must be issued with a renewable provision no less than guaranteed renewable

What is the definition of inflation protection with a LTC policy? A. Insurers offer policyholders the option to increase benefits without evidence of insurability B. Insurers allow full benefits if the insured is confined to a nursing home C. Insurers allow the purchase of more coverage with a medical exam D. Insurer waives the premiums if the insured is confined to a nursing home

A. Insurers offer policyholders the option to increase benefits without evidence of insurability Without requiring evidence of insurability, insurers must offer policyholders the option to increase their benefit levels as inflation moves the prices of long-term health care up

Which of the following statements best describes a nursing home? A. It provides professional health-care services around the clock in the most cost-efficient manner B. It provides independent and group living as well as hospitalization C. It provides residents with their own apartment and on-call nursing services D. It provides a friendly environment, custodial care, and some personal care

A. It provides professional health-care services around the clock in the most cost-efficient manner A nursing home provides professional health-care services around the clock in the most cost-efficient manner

Asset protection under Medi-Cal is a feature of which of the following types of long-term care policies? A. Partnership policies only B. Traditional policies only C. Both traditional policies and partnership policies D. Neither traditional policies nor partnership policies

A. Partnership policies only Only Partnership LTC policies provide the advantage of asset protection under Medi-Cal

Which of the following statements about qualified long-term care insurance policies is FALSE? A. The benefit triggers under qualified long-term care policies are the same as under nonqualified policies B. Qualified long-term care benefits are income tax free, subject to certain per day limitations C. Qualified long-term care policies are subject to special consumer protection requirements that don't apply to non-qualified policies D. Premiums for qualified long-term care insurance are deductible as a medical expense, within certain limits

A. The benefit triggers under qualified long-term care policies are the same as under nonqualified policies Because of differences in state and federal laws, people who purchase federally qualified policies may be required to have a greater level of disability to qualify for benefits than people who purchase nonqualified policies

Whic of the following is NOT a requirement of a tax-qualified, long-term care policy? A. The insured's physical impairment must be expected to last at least 30 days for benefits to be paid B. The contract must be guaranteed renewable C. The contract must not provide for a cash surrender value or other money that can be paid, assigned, borrowed, or pledged D. The contract must meet certain consumer protection standards

A. The insured's physical impairment must be expected to last at least 30 days for benefits to be paid The insured's physical impairment must be expected to last at least 90 days for benefits to be paid

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? A. $2,500 B. $1,000 C. $3,500 D. $0

B. $1,000 In this situation, the insurer may pay the agent the full first-year commission rate only on the $1000 difference in premium between the old and new policy. It may pay the agent the standard renewal commission on the $2500 balance of the premium

Which is not a reason for someone to buy a long-term care policy? A. The option for long-term care insurance is not unlimited B. 40 percent of people will be in a nursing home before they`re eligible for Medicare C. The financial burden of the rising cost of nursing home care D. Medicare will not be available for long nursing home stays

B. 40 percent of people will be in a nursing home before they`re eligible for Medicare 40 percent of the people who need long-term care are between the ages of 18-64

Whic of the following would not be a common LTC exclusion? A. Mental and nervous disorders B. Alzheimer illness C. Self inflicted injuries D. Drug and alcohol addictions

B. Alzheimer illness Mental and nervous disorders other than Alzheimer`s disease (somecover Alzheimer's)

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? A. California Partnership Program B. HICAP C. California Council for Seniors D. AARP

B. HICAP HICAP provides assistance for seniors and their families with Medicare, Medi-Cal, LTC, and other health care programs by providing counselors and education. They even provide legal assistance with claims. All of these services are free

All of the following are true about HICAP except: A. HICAP is a funded by federal, state and local governments B. HICAP providers information and counseling solely about the Medicare program C. HICAP`s workforce are trained certified volunteers D. HICAP is free to consumers

B. HICAP providers information and counseling solely about the Medicare program 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: A. Health Insurance Consumer Assistance Program B. Health Insurance Counseling Advocacy Program C. Health Insurance Commerce Aging Program D. Health Insurance Consumer Advocacy Program

B. Health Insurance Counseling Advocacy Program HICAP (Health Insurance Counseling Advocacy Program) is a state and federally funded program for Medicare beneficiaries, their families, and anyone who needs to know about Medicare

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? A. Community based care B. Home care C. Home health care D. Assisted living

B. Home care 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

Most LTC policies are known as all the following except: A. Indemnity B. Medical Trigger C. Per Diem D. Expense Incurred

B. Medical Trigger Most LTC policies are known as indemnity or expense incurred policies. An indemnity or per diem policy pays up to a fixed benefit amount regardless of what you spend

Policy premiums vary according to each of the following except: A. Length of coverage B. Past health conditions C.Daily benefit D. Waiting period

B. Past health conditions Past health conditions do not affect policy premiums

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: A. Pre-selection underwriting B. Post-selection underwriting C. Pre-claim selection underwriting D. Illegal underwriting

B. Post-selection underwriting Post-claim underwriting is also known as post-selection underwriting which is illegal when writing health and disability products. 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: A. Extended Term B. Reduced Benefits C. Cash Surrender Value D. Reduced Paid Up

B. Reduced Benefits Non-forfeiture provisions can apply based on: 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 results 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. No further premiums would be needed

California Partnership for Long-term Care policies does all the following except: A. Seeks to protect customers from having to spend down their assets B. The insurer may deduct paid out benefits from their state income tax C. Allows customers to take a tax deduction with a tax qualified plan D. Seeks to protect assets from Medi-Cal estate recovery

B. The insurer may deduct paid out benefits from their state income tax 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

Which of the following is not a non-forfeiture provision for LTC? A. Reduced Paid Up B. Extended Term C. Annual Renewable Term D. Cash Surrender Value

C. Annual Renewable Term Annual Renewable Term is a type of life insurance, not a LTC non-forfeiture provision

Once the elimination period in a long term care policy has been met which of the following periods would begin? A. Disability period B. Waiting period C. Benefit period D. Accumulation period

C. Benefit period Once the elimination period has been met (satisfied) then the benefit period would begin. A 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? A. California Law B. Federal Law C. Both California and Federal law D. Neither California or Federal Law

C. Both California and Federal law Both California and Federal law give favorable tax treatment to qualified long-term care policies regarding the taxation of benefits and deductibility of premiums

Qualified long-term insurance policies are entitled to special tax advantages under A. California law but not federal law B. Neither federal law nor California law C. Both federal law and California law D. Federal law but not California law

C. Both federal law and California law Generally, federal law and California law include the same provisions regarding the taxation of qualified long-term care insurance premiums and benefits

Which one of the following would not be a trigger of benefit under a LTC policy? A. Toileting B. Bathing C. Driving D. Eating

C. Driving Payments of the long-term care insurance benefit commence when a doctor certifies that the patient is functionally impaired, which means being 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: A. Individual B. Group C. Endorsement/Rider to the Medicare supplement D. Endorsement/Rider to a life policy or to an annuity

C. Endorsement/Rider to the Medicare supplement Endorsements, riders, or amendments to products that must coincide with a government program

Each of the following benefits are available with a LTC policy except: A. In-Home Health Care B. Nursing Home Care C. In-Patient Hospital Care D. Adult Day Care

C. In-Patient Hospital Care This is a Medicare required service, not a LTC benefit

Insurers must offer inflation protection for all of the following types of LTC policies except: A. Indemnity based long term care policies B. Group long term care C. Life insurance policies LTC riders D. Individual long term care policies

C. Life insurance policies LTC riders Inflation protection must be offered on all individual and group LTC, however does not require it to be offered when the LTC benefit is a rider on a life or annuity policy

Most long term care expenses are paid by: A. Medicare B. Private long-term care insurance C. Medicaid (Medi-Cal) D. Private medical expense insurance

C. Medicaid (Medi-Cal) 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

HICAP provides all the following except: A. Medicare information B. Medigap consulting C. Medicare financial assistance D. Medicare counseling

C. Medicare financial assistance HICAP provides information, counseling and assistance to consumers regarding the Medicare program, supplemental (Medigap) insurance, long-term care insurance, and other health insurance issues. This program doesn't offer financial assistance

Which category of LTC services provides the highest level of service? A. Adult Day Care B. Assisted Living Care C. Nursing Home Care D. In Home Health Care

C. Nursing Home Care Nursing home care provides the highest level of service. Care provided in a nursing home is on three different levels: custodial, intermediate, and skilled

Who would be the most likely candidate for purchasing a LTC policy? A. Those who do not have any assets to preserve B. Those who will depend on relatives for care, or for the funds to pay for care C. Those who have the resources to pay the premiums D. Those who do not wish to maintain their financial independence

C. Those who have the resources to pay the premiums The client must be able to afford the LTC policy

Which of the following statements is correct? A. Annuities have surrender charges and life insurance does not B. Annuities have a stepped up in basis at death and life insurance does not C. Both the annuity and life insurance grow tax-deferred so they will accumulate at rate D. Annuities do not pass tax-exempt however life insurance does

D. Annuities do not pass tax-exempt however life insurance does Only life insurance passes tax-exempt (income tax free) at death

When an agent solicits a sale of long-term care insurance, the outline of coverage must be delivered to the applicant: A. When the first premium is paid B. When the policy is delivered C. At the expiration of the free-look period D. Before the presentation of an application or enrollment form

D. Before the presentation of an application or enrollment form In the case of agent solicitation, the outline of coverage must be delivered before the presentation of an application or enrollment form

A person who is NOT self-employed may deduct the premiums for qualified long-term care insurance as a medical expense: A. Regardless of whether the person itemizes deductions or not B. Only if the person itemizes deductions, and the person's deductible medical expenses are less than 7.5% of adjusted gross income until 2016 when it changes to 10% C. Only if the person does not itemize deductions D. Only if the person itemizes deductions, and the person's deductible medical expenses exceed 10% of adjusted gross income, seniors 7.5% until 2016

D. Only if the person itemizes deductions, and the person's deductible medical expenses exceed 10% of adjusted gross income, seniors 7.5% until 2016 Premiums for qualified long-term care insurance are deductible by a person who is not self-employed only if the person itemizes deductions and the person's deductible medical expenses exceed 10% of AGI. For seniors it remains 7.5% until 2016

Whic of the following would not be considered an ADL or a trigger for LTC benefits? A. Person cannot feed himself B. Person can`t take a bath or shower C. Loss of voluntary control over urinary discharge D. Person cannot walk and can only get around in a wheel chair

D. Person cannot walk and can only get around in a wheel chair Loss of ambulation does not trigger LTC benefits. Many people who use wheelchairs can remain at home and care for themselves

Long term care is especially needed when an elderly person requires assistance with activities of daily living due to: A. Diminished social and personal skills B. Acute care C. Limited financial resources and fixed budgets D. Physical or cognitive impairments

D. Physical or cognitive impairments As a person ages the ability to do simply activities of daily is impaired either by physical or mental limitations and they require assistance. An elderly person might require help getting in and out of the bath tub or assistance with wash their hair due to being frail

The most important benefit of the California Partnership Program is: A. The insured may interchange benefits between two policies B. The insured only has to meet their deductible once a year C. The insured gets to waive their premiums once receiving benefits D. The insured can apply for Medicaid benefit

D. The insured can apply for Medicaid benefits The most important benefit of the Partnership Program is that the insured can apply for Medicaid benefits even though they haven't sold and used their assets

The purpose of the Long-Term Care Insurance Personal Worksheet is primarily to determine: A. Whether an applicant for LTC insurance meets the insurer's underwriting standards B.Whether an insurance company is financially sound C. An agent's annual commissions for the sale of LTC insurance D. Whether an applicant's purchase of LTC insurance meets the insurer's suitability standards

D. Whether an applicant's purchase of LTC insurance meets the insurer's suitability standards The Long-Term Care Insurance Personal Worksheet is used to determine whether the purchase of LTC insurance is appropriate for the applicant's needs