CRPC Long-Term Care Planning 5

Question 1

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?

Accepted Answer

Invoking a contingent nonforfeiture benefit on the existing policy

Answer

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

Question 2

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?

Accepted Answer

$4,710

Answer

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.

Question 3

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?

Accepted Answer

Type A (Life Care) contract

Answer

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.

Question 4

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

Accepted Answer

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

Answer

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).

Question 5

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

Accepted Answer

Purchasing a deferred income annuity with an LTC doubler rider

Answer

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.

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC Long-Term Care Planning 5