CII R05 Long-Term Care Insurance

Question 1

What is 'long-term care insurance' designed to cover?

Accepted Answer

The cost of care in a residential or nursing home, or domiciliary care, when the individual can no longer care for themselves

Answer

Terminal illness treatment costs

Answer

Loss of income during a short-term illness

Answer

Funeral costs and estate administration expenses

Question 2

What is a 'pre-funded' long-term care plan?

Accepted Answer

A plan taken out in advance (typically in working life) to fund future care needs

Answer

A plan purchased at the point of needing care, funded by the local authority

Answer

A plan funded exclusively by NHS grants

Answer

A plan where care costs are paid retrospectively

Question 3

What is an 'immediate needs annuity' in the context of long-term care?

Accepted Answer

An annuity purchased with a lump sum at the point of needing care, providing a regular income to fund care home fees for life

Answer

An annuity purchased at retirement to provide income during working years

Answer

A government-funded care payment for those with no savings

Answer

A joint life annuity that covers both care and funeral costs

Question 4

What is the current (2026) capital threshold below which local authorities in England must contribute towards care costs?

Accepted Answer

£23,250

Answer

£100,000

Answer

£125,000

Answer

£500,000

Question 5

Which of the following is a key risk associated with pre-funded long-term care insurance?

Accepted Answer

The policyholder may never need care and receive no benefit from the policy

Answer

The premiums are too low to make a profit for the insurer

Answer

The policy automatically converts to life assurance after 10 years

Answer

Long-term care is fully funded by the NHS so private insurance is redundant

Question 6

What is 'domiciliary care' in the context of long-term care insurance?

Accepted Answer

Care provided in the individual's own home

Answer

Care provided in a residential nursing home

Answer

Care funded by the local authority

Answer

Care provided in a hospital setting