Long-Term Care Planning Flashcards

A 72-year-old client already owns a traditional LTC policy purchased 10 years ago. She is concerned about a large premium increase. Which option does NOT typically require evidence of insurability?

Answer: Invoking a contingent nonforfeiture benefit on the existing policy

Contingent nonforfeiture benefits are triggered by substantial premium increases and allow the insured to convert to a paid-up reduced benefit without new underwriting.

For tax purposes, what is the maximum amount of LTC insurance premiums that a 65-year-old can include as a medical expense deduction in 2024?

Answer: $4,710

For 2024, the age-based deductible limit for LTC insurance premiums for individuals aged 61–70 is $4,710, subject to the 7.5% AGI floor.

A couple entering a Continuing Care Retirement Community (CCRC) pays a large upfront entrance fee. Which contract type offers the greatest financial risk to the resident if the facility closes?

Answer: Type A (Life Care) contract

Type A contracts require the largest entrance fees in exchange for unlimited care, so residents bear the greatest financial exposure if the facility becomes insolvent.

Which of the following best describes the 'restoration of benefits' provision in an LTC insurance policy?

Answer: The benefit pool is fully restored if the insured recovers and makes no claims for a specified period

A restoration of benefits provision rebuilds the policy's benefit pool to its original amount if the insured recovers sufficiently and remains claim-free for a defined period (often 180 days).

Which financing strategy is most appropriate for a client who wants to self-insure against LTC costs but has limited liquid assets?

Answer: Purchasing a deferred income annuity with an LTC doubler rider

A deferred income annuity with an LTC doubler rider provides a guaranteed income stream that doubles if the owner needs qualifying long-term care, addressing both longevity and care risk with moderate premiums.

A client's LTC insurance policy has a 90-day elimination period with a 'calendar day' method. The client needs care 3 days per week. How long until benefits begin?

Answer: 90 calendar days from the first day of qualifying care

Under the calendar day method, the 90-day elimination period is satisfied after 90 consecutive calendar days from the onset of qualifying care, regardless of how often care is actually received.

Which of the following is an advantage of Partnership Long-Term Care Insurance programs offered in most U.S. states?

Answer: Policyholders can protect assets from Medicaid equal to benefits paid under the policy

Partnership LTC policies include an asset disregard provision allowing policyholders to protect assets dollar-for-dollar equal to benefits received when applying for Medicaid.