Even though there are some provisions that are standardized (as a result of National Association of Insurance Commissioners standard policy forms), this is a most evolutionary product resulting in a variety of benefits, either in type or in degree. The primary benefits and stipulations under Long Term Care Insurance policies will be discussed in this section, with a point-by-point Policy Provision discussion. Even though a particular section of a Long Term Care Insurance policy may be discussed in this section, it is beneficial to see how the various benefits, definitions and other provisions, integrate into the policy form.
It is not possible at this time to fully discuss all available provisions of a LTC Insurance policy, as it is such a changing product because of regulation and the gathering of statistics by the actuaries. Therefore, any agent should carefully study the provisions of the policies that they have contracted to sell. As an example, one health insurance agency contracted with three insurers to sell their LTCI policies. One company marketed a policy that paid Daily Benefits only up to the amount of reasonable and customary charges and no one in that agency had discovered this. The end result was that all of the policyholders of this particular plan were contacted and this benefit restriction explained. This led to some red faces and some cancellations. These policies are no longer marketed, but it illustrates the necessity for agents to become very familiar with their products.
Basically, there are two types of LTCI policies: reimbursement and indemnity. These may be called something else by a company, but basically they are only of these two types. One company may offer either types or only one type. There appears to be two different definitions, one offered by some writers of consumer-interest publications and the other definition is that used within the insurance industry and is more technically correct (which will be used in this text). However, an agent should make sure that published material and usage within the agency and insurer are the same.
A reimbursement policy pays for the actual services that the insured receives. “Reimbursement benefits payment by the insurance company to the insured for the actual expenses incurred by the insured, such as medical expenses.” (Dictionary of Insurance Terms) For example, if a nursing home charges a patient $250 a day and the LTCI policy limit is $200 a day, then the policy will only pay the $200 per day. If the nursing home charges $150 a day, then that is what the policy will pay – “up-to” is what these policy benefits are sometimes called.
Technically, indemnity is compensation for a loss. In a property and casualty insurance contract, where one usually hears of this term, the objective is to restore an insured to the same financial position after the loss that he/she was in prior to the loss. In life insurance, a payment of a predetermined amount does not make a life insurance policy a contract of indemnity. For hospital indemnity and other health insurance plans, “Coordination of Benefits” clauses are designed so that the insured cannot profit from an illness.
In respect to the “pool” of money concept, basically an individual’s total benefits is determined by multiplying the daily benefit chosen by the benefit period. Simply put, if the policy has a $200 daily benefit and has a 3-year benefit period (1095 days), the amount of the “pool” is $219,000. Therefore, under an indemnity policy, if the insured had $200 a day benefit for every day he was disabled and if he required at least one visit each day from a home care provider who only charged $100 per day, after 3 years the benefits cease. Under a reimbursement plan, he would have been reimbursed the actual cost, therefore his pool of money would last more than 3 years. This would be important if the insured was still alive and disabled after 3 years (1095 days).
Another advantage of indemnity plans is that under the reimbursement plan, only licensed caregivers can provide services, but with an indemnity plan, it may let the insured pay family members or informal caregivers who cost less than licensed providers. Indemnity policy providers maintain that their claims don’t cost much to process, less overhead, so the premiums should be less. Reimbursement insurers maintain that their premiums are lower because claims for reimbursement claims costs tend to be lower. Actually the jury is still out on this and the premiums are nearly the same, but it is possible that the indemnity plan insurers may have to play catch-up in 10 years or so as they would still have funds outstanding earmarked for claims where the reimbursement plan would have paid all their claims.
At claims time, if the plan is indemnity, then the money goes to the insured who writes the checks. With a reimbursement policy, the insurer requires only one claim form a year for each service provider – after that the provider bills the insurer.
The “Care Manager” or Care Coordinator” – discussed later – comes into play in determining the difference between the plans. With an indemnity plan, usually it is up to the insured to provide their own care manager or hire a professional to arrange these things. The reimbursement company provides the insured with a company-paid care manager. This leads to a debate as the indemnity company will maintain that the paid managers are actually paid “gatekeepers” who may be unwilling to certify the care needed by the insured. The reimbursement company will maintain that this is not true, the care managers have no axe to grind and have no motive other than to assist the insured when they need help the most.
Some insurers have blurred lines a little by offering an indemnity option, a cash benefit rider, on its reimbursement plan.
F Of the 20 most popular LTCI programs in the Life Insurance Selling survey, two were reimbursement for both nursing home and home health care; one was indemnity for home health care and reimbursement for nursing home, all the rest were indemnity for nursing facility and reimbursement for home health care.
One ofthe most important features of a long‑term care policy is what must happen in order to receive benefits from the policy –– the coverage triggers or "gatekeepers" or "safety net,” as they are often called. These were discussed earlier in the section on tax-qualified/non-tax-qualified policies.
In the early policies, coverage triggers were often highly restrictive as to coverage but this is no longer the case, thanks to customer and regulatory pressure and regulations.
Under HIPAA, Congress decided that they wanted its tax-qualified plans to contain two, and only two, benefit triggers. Not only did Congress limit the triggers, but within the two, they imposed restrictions that were not there previously.
Congress eliminated “medical necessity” as a benefit trigger. For younger claimants, “medical necessity” is probably the fairest of the benefit triggers. Simply put, this trigger states that due to a diagnosable medical problem, care is needed. The medical problem could be obvious, such as a stroke, cancer, disabling accident, etc. –– or less obvious, such as Alzheimer’s or senile dementia.
Congress decided to make people eligible for claim payments only if they suffer from chronic, long-term care problems that would make them unable to substantially perform two of five or six activities of daily living. Additionally, patients must get medical certification that the loss is going to last at least 90 days, or prove that they are unable to function without causing danger to themselves or others.
As reported in trade publications, Congress effectually eliminated most short-term claims, even those that can be quite costly. Those that suffer from a chronic disability will not necessarily qualify them to receive benefits under a tax-qualified plan. One must still meet the two triggers mentioned above.
An interesting note is that the more restrictive provisions have not caused all companies to reduce the cost of their policies, although there are a very few companies that charge more for those non-tax-qualified plans (effectively accomplishing the same thing).
Since HIPAA was enacted in 1996, some of the companies who sold LTCI policies prior to this legislation have reported that only a small percentage of claims that the company paid would have been paid if all the policies were tax-qualified, ranging from 5% to 20%. This is really immaterial at this point as the greater percentage of LTCI policies sold today is tax-qualified.
The major benefit “trigger” is that the insured is unable to perform a specific number of ADL’s. Policies typically list what are considered ADL’s and different policies might require the inability to perform a different number of ADL’s to qualify for benefits. For example, Policy Number One might pay benefits for someone who cannot perform two of the ADL’s the policy lists, while Policy Number Two pays for the inability to perform three ADL’s listed. (Note restrictions under HIPAA) Typical ADL’s are Eating, Dressing, Toileting, Transferring, Continence, and sometimes, Bathing and Taking Medication.
Some policies require a physician to certify that the individual cannot perform ADL’s without assistance.
Policies vary in how specifically they define the inability to perform ADL’s. Many do not define it at all, while others clearly describe what criteria indicate, for example, that individuals cannot bathe themselves. One policy might require that someone else must actually draw the bath water or turn on the shower, help the individual into the tub and do the actual washing and drying, etc. Another policy might require only that another person must be present in a supervisory way to assist as needed, rather than to do everything for the individual (“stand-by” assistance as discussed earlier).
An agent must often interpret policy language in order to determine the exact coverages. For help with ADL’s, the policy might refer to assistance with physical needs, and then list qualifying ADL’s. Insureds will prefer policies that pay for "supervisory," stand‑by" or "reminding" assistance instead of continuous, hands‑on help. Also, policies that list bathing as an ADL may pay sooner because the inability to sit down in a bathtub may occur sooner than the inability to dress or feed oneself,
Cognitive impairment includes any organically‑based brain disease, such as Alzheimer's or Parkinson's disease, and is generally characterized by the deterioration of intellectual functioning. Cognitive impairments may manifest itself in various forms, including loss of memory, disorientation, loss of reasoning ability, inability to make judgments and others. A physician's diagnosis is typically required. Policies usually define exactly what is considered cognitive impairment.
References to difficulty with short‑term and/or long‑term memory usually indicate a liberal approach to cognitive impairment.
The difference between tax-qualified and non-tax-qualified policies requiring that care be medically necessary is that, today, this is not typically the only requirement, but just one of several that may trigger coverage. The tax-qualified plans under HIPAA have effectively eliminated this “trigger”, but there are many non-tax-qualified plans that either are in force, or are still offered.
Medical necessity might result from an injury or illness, the latter possibly including cognitive impairment, depending on how the particular policy reads. The best definitions of medical necessity indicate that the care is "appropriate for the insured's condition. "Experimental” types of care are often excluded.
In today's more liberal policies, where medical necessity is usually just one of several alternatives, this gatekeeper provision generally permits coverage for conditions that do not fit the ADL or cognitive impairment definitions. On the other hand, be reluctant to sell policies where medical necessity is the sole coverage trigger, in which case the policy is very restrictive and obviously, not tax-qualified.
As illustrated above in the situation where agent’s were selling a policy that they had not read, resulting in heavy consequences, every person selling or offering a LTC Insurance policy, MUST read each policy carefully. In particular, they must know how to determine the coverage triggers. While most companies are offering only tax-qualified products, many still offer a “non-tax-qualified” policy. The agent must be careful that the difference between the two policies stress that only the two “triggers” are available (at this time) under the tax-qualified policies.
For existing, or non-tax-qualified policies, it is possible that the provision describing the circumstances under which benefits are payable does not spell out the three gatekeepers described above in precisely that manner. A person would have to "translate" the policy language in order to understand exactly what is required to receive benefits. It is extremely important for the applicant to fully understand these requirements. Some of the problems that arose with early LTCI policies came about because agents told clients they were covered for situations the policy did not cover. Some agents subsequently found themselves in court dealing with errors and omissions lawsuits. In addition, unhappy consumers may file complaints that eventually lead to further government legislation.
A long‑term care policy's elimination period, sometimes called a deductible period, is a period of time during which no benefits are paid immediately after the insured is qualified to receive long‑term care.
Because the insured absorbs the first costs incurred, the elimination period serves the same purpose as a deductible amount for medical expense or auto or homeowners insurance. The insurance buyer may select a longer period (thus paying more out‑of‑pocket) in order to lower the premium.
Insurers typically offer elimination periods ranging from zero days (no elimination period) up to 365 days, with different insurers offering different options. Shorter periods up to about 90 days are most common, but periods currently available include seven, ten, 15, 20, 30, 45, 60, 90, 100, 120, 150, 180, 270 and to as long as 365 days. The actual periods offered vary from insurer to insurer and it's unlikely a single insurer would offer all of these choices. For example, insurer XYZ might offer periods of zero, 20, 60 or 180 days, while insurer ABC offers zero, 30, 90 and 365 days. The insurer may also specify the elimination period with no option for the insured to choose.
Under policies that pay benefits for different kinds of care, a single elimination period usually qualifies the insured for all types of care.
For example, assume the elimination period is 60 days. The insured first requires skilled care for ten days in a Skilled Nursing Facility, followed by 20 days of intermediate care in the same facility, then goes home to receive 60 days of intermittent skilled care and custodial care before recovery is complete. Thirty days of the elimination period is fulfilled in the nursing facility. The insured absorbs the cost of the first 30 days at home to fulfill the 60 day period and benefits are paid for the balance of 30 days. When the same elimination period applies to all types of care, this is sometimes called an "integrated" elimination period.
That same term –– integrated elimination period –‑ sometimes means that the elimination period must be fulfilled only once during the life of the policy. For example, suppose insured Potter has a policy with a lifetime benefit period. He has fulfilled the elimination period during a nursing home confinement, has returned home and now, a year later, must enter a nursing home again. Potter's LTC Insurance policy begins paying benefits from the first day of nursing home confinement since the elimination period was previously satisfied. Typical provision.
On the “flip side,” Consumer Reports (Who starts out their report on the first page, “Long-term-care insurance may be a lousy deal, but right now it’s just about the only deal.”) maintains that there never is a good time to buy. Since many prospects will have read this report, their conclusions are important. They state that a plan that costs a 50-year old $1,625 annually will run a 60-year-old $3,100 and a 70 year old $7,575. Obviously they picked plans that met their criteria as “acceptable,” which means a short elimination period, 4 years of benefits, etc.
They further state that is a person age 40 buys a LTCI policy with a premium of $685 annually, and since the average age of people being admitted to a nursing home is 83, that means that the insured would have to pay for 40 years before knowing whether the policy will even be used.
And of course, there are the premium increases. If an individual cannot pay the increased premium, the insured may have to bail out of that policy and unfortunately that can happen when the insured is retired or has lost a spouse. If they choose not to pay, they may not be healthy enough to qualify for a new policy with another company. All of these things must be taken into consideration.
Insureds may be able to choose different elimination periods for different types of care, such as 30 days for nursing home care and ten days for home health care. At least one insurer specifies that a 90‑day elimination period applies for nursing home care and a 30‑day period for home and community‑based care and the insured may change the periods only by adding a rider to the policy. Another policy offers elimination periods in a range of zero to 365 days for nursing home care, but for home care the insured chooses either seven, 20 or 60 days.
The newer policies generally offer the same care-related elimination periods, and in reviewing the 20 policies surveyed by Life Insurance Selling, only one company offered different elimination periods for home care and adult daycare.
The length of the elimination period is another critical factor affecting the cost of LTCI policies. First‑day coverage (no elimination period) is nice, but costly. On the other hand, an insured whose long-term care begins in a skilled nursing facility will incur fairly high daily expenses that must be paid from personal funds during the elimination period. This means the insured must decide how much he or she can handle financially before the policy begins paying benefits.
For example, let's say the nursing home costs $90 per day. The insured selected a 90‑day elimination period. If this individual becomes very ill and must be in the nursing home for a long period, he or she conceivably could be required to pay:
$90 per day x 90 days = $8,100
This $8,100 comes out of the insured's pocket before any policy benefits begin on the 91st day of care. In addition, remember that most nursing home confinements last fewer than 90 days, so the insured might pay the full cost, having recovered before the elimination period passed, with the result that they will receive no benefit from the policy at all.
The trade‑off's are between a shorter elimination period (less out‑of-pocket expense) and higher policy premium versus a longer elimination period (more out‑of‑pocket expense) and lower policy premium. Unlike choosing the benefit period, this decision is less of a gamble because it is based largely on finances and people generally know how much of the cost they can absorb. The problem, however, is that people's financial circumstances change and not always for the better. Someone who believes he could easily absorb the $8,100 mentioned in the previous paragraph, for example, could suffer setbacks such as unemployment or investment losses that would make such a payment difficult or impossible in the future.
In a discussion about benefit periods, the best choice is probably the longest period the insured can realistically afford. For the elimination period, the advice might well be just the opposite: Choose the shortest elimination period that is realistically affordable. An agent should be particularly sensitive to financial circumstances in this regard. People who can afford to buy LTC Insurance, but who are not particularly well‑fixed financially, shouldn't be encouraged to stretch out the elimination period extensively in order to lower the premium to where they feel it is affordable. There is a school of thought that believes that even a small Daily Benefit policy is better than no policy. Because of the crowded conditions of the nursing homes, a policy of any amount will help admit a person to a good nursing home. When the benefits expire, they usually cannot be moved to the “Medicaid” ward, particularly in view of the recent legislation discussed earlier.
However, if such clients eventually need long‑term care, they won't be happy with a policy that pays only after they have depleted their savings unless they fully and completely understand what the situation is. Unfortunately, many insureds that require long-term care are not in any condition to remember the explanation made at the time of the sale – another reason that a true professional stays in touch with their customers. Also, if the insured has to have nursing home care and is in no condition to handle the details, family members – frequently who live some distance away – may not be aware of the financial decisions made at the time of the sale. It is important to gather enough information about the clients' finances to help them make an informed choice and be certain the advice is both financially and ethically sound.
One other thing to take into consideration when discussing this with a senior citizen prospect – Medicare does pay for the first 20 days entirely after a 3-day hospital confinement, and for the 21st-100 day, everything except $114 (2005) is paid. Many persons will take the chance that they may be in a position where Medicare does not pay, such as for some mental deterioration where they would not be in the hospital for 3 days – but the chances are greater that they would go into a nursing home after having been in a hospital because of accident or illness. Some LTCI policies offer 100 day elimination periods for this very reason.
Consumer Reports, for your general information, takes a different tack, maintaining that “Don’t choose a policy with an elimination period longer than 30 days unless you think you will have money saved to pay for a longer period.” They appear to have completely ignored the fact that Medicare will pay for nursing home care in a sizeable percentage of the situations.
F If a Care Manager or Care Coordinator is involved, many policies will waive the elimination period, making the length of the elimination period, a moot point.
Coverage is written on the basis of a daily benefit amount, with a wide span between the minimum and maximum amounts available. The daily benefit amount generally applies to nursing home care and may or may not vary for care in other types of facilities. Nursing home benefits will be discussed first, and then the text will address various ways policies handle benefit payments for care under other circumstances.
An important point about the daily benefit is that this is usually the maximum amount the policy will pay for a day of care. Most policies stipulate that the insurer will pay 100% of actual costs incurred up to the daily benefit amount. See discussion prior in respect as to how this is handled with reimbursement type policies and indemnity type policies.
Policies available as of this writing offer daily nursing home benefits ranging from as little as $20 per day to as much as $500 per day with most having a maximum of $300. Some policies place a minimum on the total maximum benefits, such as $900,000, and one company has maximum daily benefit of $10,000 per month and another has a maximum of $12,000 per month. Some have no maximum published. Insureds generally may choose from the insurer's offerings in $10 increments after the minimum. If an insurer offers a minimum of $40 and a maximum of $200, the insured could choose, for example, $50 or $80, (but not $75) in $10 increments up to $200.
The amount of the daily benefit is one of the critical pricing factors‑the higher the daily benefit, the higher the premium, all other things being equal. The advent of the “pool” approach has created some confusion in this respect – it used to be simple, just so much per day but now things are different.
People who choose a lower daily benefit may not have all of their care costs covered and must make up the difference. In addition to considering the premium that will be required, selecting the appropriate amount also involves at least two factors:
In many parts of the U.S., the $200 per day average will currently cover most nursing home costs. But in some parts of the U.S., especially the West Coast and the Northeast, $300 per day may be more realistic. A professional agent and his clients should both be aware of average nursing home costs where the insured lives. Even better, the insured may know exactly what nursing home he/she would prefer if it were necessary, find out the daily rate, and use that figure as a guideline.
Determining the exact figure for a specific nursing facility is sufficient only if the policy includes an option to have the daily benefit amount indexed for inflation. Inflation protection will be covered in more detail later, but just be aware that it is very important. Some LTCI policies will be purchased 20 years before they are ever used. Relying on the past as a portent for the future, a benefit purchased on the basis of today's costs only is likely to be woefully inadequate 20 –– or even ten years –– from now.
The various levels of care‑custodial, intermediate and skilled nursing care were discussed and defined previously. Most newer LTCI policies cover all levels of care and do not require any prior higher level before paying for lower levels, such as a requirement for skilled care before paying for custodial care. Most state laws now require that all levels be covered under LTC Insurance policies.
Some older policies, which may still be in force, incorporated such requirements, often including prior hospitalization lasting at least three days. This limitation excludes the payment of benefits for some of the most common needs for long‑term care, for example, people who suffer from Alzheimer's disease rarely require hospitalization, but do need custodial care. Fortunately, most policies currently available for sale have eliminated this very severe restriction. In most, if not all, states, such restrictions are illegal.
Today, most LTCI policies pay benefits for any level of care the insured requires without a higher level of care as a prerequisite. However, some policies still require a period of confinement in a nursing home before paying home care benefits.
Associated with the level of care is where care occurs. Newer LTCI policies usually pay benefits at skilled nursing facilities, intermediate care facilities and custodial care facilities, but long‑term care can occur in a variety of different settings. There is wide variation in what types of settings qualify insureds for LTC Insurance policy benefits. When care is provided anywhere outside the home, policies usually require the facility to be state‑licensed.
By far the greatest number of policies offered today includes both nursing home and home care. As described in this text, the newer policies offer the “Pool of Money”, or “Lifetime Payment Maximum” wherein the Home Health Care payments may not be restricted as to a function of the Maximum Daily Benefits, but the entire amount may be paid (and thereby decreasing the Lifetime Payment Maximum). Many newer policies automatically include home care and home health care benefits, while others offer such benefits as an optional rider for an additional premium. There are also "stand‑alone" home care policies that cover only care at home, not in any other type of facility.
When benefits are paid for home care, the agent must also know what types of care are covered at home. For example, a few policies might pay for home health care, but only if it is provided by skilled medical personnel, such as registered or licensed practical nurses or various types of therapists. In this case, there is no coverage for custodial care at home. Other policies cover skilled care as well as expenses incurred by home health aides, homemaker services and others. Many policies do not pay for home care provided by family members even if those people are licensed to care for others, but it might be discovered that the policy will pay family members who are licensed or certified caregivers. Some policies even make provisions to pay for the training of a family caregiver.
Policies that pay hospice and respite care benefits often cover such care whether it occurs in the home or in an outside facility.
In general, alternate care is care provided anywhere other than at home or in a nursing home. Some insurers use just this terminology, but most will further define it, limiting benefits to certain types, such as adult day care, hospice care, assisted living facilities, or whatever facilities a particular policy specifies. Some policies specifically name Alzheimer's centers and Christian Science facilities as covered locations.
One term sometimes used in association with alternate care is community‑based care, which also might be further defined. Community‑based care occurs in assisted living facilities, nursing homes, adult congregate living facilities, adult day care centers and others. Often a physician must indicate that the proper care can be provided in such a facility, especially when only custodial care is needed.
Be careful to determine precisely what facilities are included. Some policies exclude care that occurs in "homes for the aged," for example, a term that must be further defined. Another caution for agents: A policy that pays for "alternate care" does not necessarily pay for home care. In the past, agents have mistakenly informed clients that alternate care is home care, but it is not.
When a long‑term care policy also covers home care, the daily benefit might not be the same as for care received in a nursing home. It is mentioned earlier that some policies cover care at home only when it is health care provided by a skilled medical professional, while other policies pay benefits for various types of home care. In either event, the daily benefit available for skilled nursing care at home under newer policies is usually the same as the nursing home benefit, although some policies are for some percentage of the daily benefit – such as 70% or 80%.
Under some policies, an hourlyfigure and a daily maximum are stipulated. For example, the policy might pay up to $20 per hour, but no more than $60 per day.
At least one policy currently on the market has an even more complicated formula for paying home care costs. That particular policy pays:
Basically, companies are more competitive in their coverage for home care. Typically, home care benefits cover approximately 36 hours a week of care, even though the average beneficiary needs 59 hours and the additional funds comes out of the insured’s pocket.
Today, most policies have a weekly benefit for home health care, not a daily benefit. This change was because there were too many situations where an insured had assistance for part of the week from a family member, but the daily benefit did not cover completely the daily charge when a paid caregiver was required. By making the benefit a weekly benefit, this problem was eliminated.
Insurers use many methods to pay for the home care benefits and the same insurer might offer different policies with different funding arrangements. It must be clearly and completely understood how the benefits are determined and applied for the particular policy represented.
Policies that pay benefits for alternate care, such as adult day care, assisted living facilities, respite care and others generally attempt to be consistent with the benefits that are paid for home care. For example, if the policy pays actual expenses up to 80% of the nursing home benefit for home health care, it likely pays that same amount for care in alternate facilities. Some policies pay up to 100% of the nursing home benefit if skilled nursing care is provided in one ofthe alternate facilities, but only 80% for other types of care.
STUDY QUESTIONS
1. In respect to how benefits are paid, LTCI policies fall into two types:
A. reimbursement and indemnity.
B. nursing home and long-term care.
C. mutual and stock.
D. participating and non-participating.
2. An advantage of the indemnity plan is in respect to caregivers:
A. the insured may pay caregivers who cost less than licensed providers.
B. caregivers must be registered nurses.
C. caregivers do not need to be American citizens.
D. caregivers receive double the daily policy benefit.
3. Under HIPAA, tax-qualified plans must contain
A. two triggers.
B. three triggers.
C. six triggers.
D. no triggers.
4. Under a tax-qualified (TQ) plan, insureds will be eligible for claim payments only
A. if they suffer from a cognitive impairment.
B. if they suffer from chronic, long-term care problems that would make then unable to
substantially perform the required number of ADLs.
C. if they were in a Medicaid qualified nursing home.
D. if they suffer from chronic disability only if they can still perform all the ADLs.
5. A deterioration of intellectual functioning defines
A. medically necessary.
B. cognitive impairment.
C. the aging process.
D. criminal intent.
6. If a policy uses “medical necessity” as the sole coverage trigger,
A. it is automatically a TQ policy.
B. the policy is very liberal and probably an excellent buy.
C. it should be marketed only to those under age 65.
D. the policy is very restrictive and is obviously not TQ.
7. In deciding upon a deductible period in a LTCI plan, it may be good advice to tell the applicant to choose
A. the longest deductible period that he can afford.
B. the shortest elimination period that he can afford.
C. a “zero” day elimination period.
D. a renewable elimination period that starts again with each new claim.
8. The amount of the daily benefit is another critical pricing factor,
A. the higher the daily benefit, the higher the premium.
B. the higher the daily benefit, the lower the premium.
C. the lower the daily benefit, higher the premium.
D. but all policies offer daily benefits only in increments of $200 per day.
9. When there are home-care benefits, the agent must know (so he can educate his applicants)
A. what types of care at home are covered.
B. that only certain types of skilled nursing care can be covered.
C. the most convenient time for home health nurses to call on the insured.
D. the best way to get the maximum out of Medicare for home health care.
10. “Alternate Care” in an LTCI policy generally means
A. limiting benefits to certain types, such as adult day care, assisted living facilities,
etc.
B. changing the insured from one nursing home to another if they do not like the
care of the first.
C. having home health caregivers come every other day.
D. having Medicaid or Medicare pick up part of the costs of a nursing home.
ANSWERS TO STUDY QUESTIONS
1A 2A 3A 4B 5B 6D 7B 8A 9A 10A