Long-Term Care Insurance Flashcards
6 cards from real Life and Health California Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Long-Term Care Insurance flashcards as text
Which LTC policy provision ensures that if the policyholder lapses a policy due to cognitive impairment, the policy can be reinstated?
Answer: Third-party notification provision
The third-party notification provision allows the policyholder to designate someone who receives lapse notices, helping cognitively impaired policyholders avoid unintentional lapses.
An 'inflation protection' rider on an LTC policy is important because:
Answer: It increases the daily benefit amount over time to keep pace with rising care costs
An inflation protection rider automatically increases the LTC daily benefit amount over time, ensuring benefits keep pace with the rising cost of nursing home and home care services.
Under a qualified LTC policy, benefits paid to the insured for long-term care are generally treated for federal income tax purposes as:
Answer: Tax-free up to a per-diem limit set by the IRS
Benefits from a tax-qualified LTC policy are excludable from gross income up to the IRS per-diem limit (or actual costs if higher), making them essentially tax-free for most recipients.
Under California LTC insurance law, insurers must offer a 'nonforfeiture benefit' option, which provides:
Answer: Reduced paid-up coverage if the policy lapses after a specified period of premium payments
The nonforfeiture benefit provides a reduced paid-up LTC benefit if the policyholder stops paying premiums after a minimum period, so they don't lose all coverage.
A long-term care policy's 'pool of money' benefit structure means:
Answer: The policy pays a fixed daily amount until a total lifetime maximum is exhausted
A pool of money LTC policy provides a total lifetime benefit (e.g., $300,000) that can be used at any daily rate, giving flexibility in how quickly benefits are drawn down.
Which setting is covered by most comprehensive long-term care insurance policies?
Answer: Nursing home, assisted living, and home care
Comprehensive LTC policies cover a broad continuum of care including nursing homes, assisted living facilities, and home and community-based care.