CHAPTER ELEVEN – CALIF. PARTNERSHIP, CALPERS,
SUMMARY & CIC OVERVIEW

CALIFORNIA PARTNERSHIP FOR LONG-TERM CARE

See Attachment II In Appendix

Partnership Laws

    Laws regulating the Partnership are found in the Welfare and Institutions Code (Not the Insurance Code).  The detailed day-to-day rules for the Partnership are found in the regulations.  However, Partnership policies are still LTCI policies, so they are also governed by most Sections of the California Insurance Code.

Participating Insurers

    The following insurers presently participate in the Partnership plan, but this may change as more companies become interested.  Note that these are all substantial companies.

1. Bankers Life and Casualty
2. GE Financial Assurance
3. John Hancock Life Insurance
4. New York Life Insurance
5. Metlife
6. CalPERS (not an insurance Company)

New State Partnerships & Reciprocity

    The hope is that the federal government will allow additional states to begin Partnership programs and eventually, reciprocity between the states, one of the plan’s current weaknesses.  If the Federal government overturns this section of OBRA an individual could purchase the plan in one state to be honored by Medicaid programs outside of the state where the plan was purchased.

California Partnership for LTC

California Partnership for LTC

Department of Health Services

Phone: 916-323-4253

Fax: 916-323-4238

Email: cpltc = dhs.ca.gov

Website: www.dhs.ca.gov/cpltc

CALPERS LONG TERM CARE

    CalPERS is a self-funded employee benefit program and by not being an insurance company allows them the flexibility in some cases not available to insurers who are bound by the California Insurance Code.

    CalPERS is nationally known for its marketing success in Long Term Care Insurance, and has sold 136,300 Long-Term Care Insurance policies, of which over 6,300 are Califor­nia Partnership policies.

CalPERS Eligibility

    The CalPERS (California Public Employee’s Retirement System) Long-Term Care Program is an additional option available to all California public employees and retirees including: city, county, and state employees, school teachers, legislators, judges, University of California employees and retirees. Also, eligible to apply are public employees’ and retirees’ spouses, parents, and parents-in-law.

Profile of LTC Plan

    Because of its flexibility, CalPERS has included new and innovative benefits and has improved on benefits normally offered on LTCI plans—such as monthly allowances for home care, compound inflation protection, a one­time elimination period, lifetime benefits, automatic three-year inflation upgrading, pot-of-money con­cepts, and care advisers, plus a return-of-premium death benefit, bed reservations, respite care, alternate care, and portability within the U.S..  Additionally, there are no maximum age limits to apply for coverage, and the minimum age depends on the practices of the public agency involved.

CalPERS - Three Plans

    There are three basic plans with several sub-options:

1. CalPERS Comprehensive,
2. CalPERS Nursing Home/Assisted Living Only; and the
3.    Partnership plans.

    This program is only available in California and therefore, the benefit limits are at or above, the state’s average cost of care.  Both the Comprehensive and Partnership plans cover the full range of services, including personal care, homemaker visits, home care, and care in an assisted living facility or nursing home.

    The “CalPERS Nursing Home Assisted Living Facility Only” plan does not provide home or community based care.

    “CalPERS Comprehensive and Nursing Home/Assisted Living Plans” offer a 90-day elimination pe­riod and an integrated benefit allowance of either $142,350 or lifetime.  With the optional inflation protection all benefits increase by 5% (compounded annually).  If inflation protection is not chosen, members have the opportunity to increase their benefit limits every third year without having to provide evidence of insurability. (Note the participants are “members,” and not “insureds,” as CalPERS is not an insurance company.)

    Premiums typically average 20% less than comparable private LTCI plans. For example, at age 65 the premium for the CalPERS Comprehensive plan with lifetime benefits and inflation protections is $177 per month.  Most of these savings result from the direct marketing and self-funded, not-for-profit as­pects of the program.

CalPERS - Additional Features

1. Bed Reservation (14 days)
2. Care Advisor (Note:  Not to be confused with a formal plan of care.  Care Advisor does not have to be created by a health professional and is only advisory in nature and is used more often in Group insurance.  In some respects, closer to a "Care Coordinator" used in some individual policies.)
3. Return of Premium Death Benefit (no additional cost)
4. Alternative Care Payment Provision
5. Guaranteed Renewable
6. The CalPERS Long-term Care Program is intended to qualify as a “Tax Qualified Long-Term Care Insurance contract.”

(NOTE: See CaIPERS Website for updated figures - www.calpers.ca.gov)

CalPERS Partnership Plans

    The CalPERS Partnership plans provide dollar-for-dollar asset protection from Medicaid (Medi-Cal) spend down, a 30-day elimination period and an integrated benefit allowance of either $40,150 or $80,300 and include 5% compounded inflation plans.

    The following is an outline of benefits, with a deductible period of 30 calendar days for each plan:

 

 

SUMMARY

The Impact of Waiting to Purchase Insurance

The prospect may become uninsurable.

The premium goes up each year.

The overall cost of the policy over the insured’s lifetime also increases.

Purchased at 40 used at 80 - total cost $22,000.

Purchased at 50 used at 80 - total cost $29,320.

Purchased at 60 used at 80 - total cost $50,000.

 

Comparison of the Cost of LTCI With Partnership Rates

 

Not only is the premium higher at older ages, but it is also likely that the purchaser will no longer qualify for preferred rates at older ages, making the premise increase even more rapidly steep.²³²

Comparison of Total Premiums Paid By Issue Age

Not only is it less expensive in the beginning, but, even though the person will pay premium payments for a longer period, a policy purchased at a younger age will still be less expensive in the long run.

Issue Age	Annual Premium	# of Years Paying Premiums	Total Premium Paid at age 85
50	$405	35	$14,175
65	$1,086	20	$20,000
79	$4,372	6	$26,232

A 79-year old person would pay almost twice the total premium as a 50 year-old, although the 50 year-old paid for more years.

 

The number of people who can pass underwriting scrutiny reduces drastically as the individual ages, therefore the 79 year-old may not be able to purchase the policy at his age, regardless of premium.

Every 10 years the cost doubles and the number of people who can still qualify for coverage reduces by 50%.

Premiums for LTC Insurance are typically based on the product design, the applicant’s health status, and the prospect’s age. The cost depends primarily on the age of the applicant. The difference is most dramatic from age 40 to age 50, but the older they are the higher the premium will be.

•   A 50 year old will pay about half as much as a 60 year old

•   A 60 year old will pay almost half as much as a 70 year old

  •    A 70 year old will pay about one-third as much as an 80 year old for the same insurance policy.

Over 40% Of People Needing LTC Are Under 65!²³³

 

 

The True Cost of Waiting

If a person “waits” to purchase protection for long-term care, or even do some long-term care planning, several things can happen, none of them good.

The individual’s health will worsen as he gets older.  This is not conjecture, this is fact—who are in nursing homes, for instance?  Primarily the elderly.  It is a very rare situation where an individual’s health gets better the older he gets—the only thing that gets better as it gets older, is wine.

The availability of funds will usually not grow significantly, if the cost of long-term care is a problem.  The usual family man will probably have children in college, homes and cars to buy, businesses to run, etc.  The hope that “in a little while I will have enough money to afford protection” is a weak response, as times goes by rapidly, and even if the health stays good, when they retire they will be on a fixed income usually—plus the fact that the cost of Long Term Care Insurance expands exponentially with age.

Some may think that the government will take care of them if anything happens.  True, if they do not mind losing everything they have worked for and become destitute so that they can participate in a welfare program. 

Most people do not want to be a burden for their children and will suffer many indignities to preserve their independence.  Not providing for long-term care ups the odds dramatically that the children will be burdened dramatically unless steps are taken so avoid the possibility that they may be a physical and mental burden for their children or other members of their family.

THE EFFECT OF INFLATION ON FUTURE NURSING HOME COSTS

The effects of living longer and out-living assets have been discussed in detail.  One of the most crucial factors is the effect of inflation on the cost of long-term care.  One of the best indicators is the increase in the cost of nursing homes over the next several years. 

 

The "measuring stick" to project inflation has been 5% as historically in recent years, this is probably as close as one can get without a real crystal ball.  Compounded, a dollar increasing five percent will double in 14 years (ergo, if inflation were 10%, the money would double in 7 years).  So, for purposes of illustration, the future costs of nursing home care is shown as doubling 14 years and then doubling again in 28 years.  The differences are dramatic. 

 

 

 

 

 

 

 

 

OVERVIEW OF CALIFORNIA INSURANCE CODE CHAPTER 2.6

Chapter 2.6. Long-Term Care Insurance

Article 1. Definitions ............................................................10231-10231.8 Article 3.

 General Provisions ........................................…………......10232-10233.9 Article 3.

Administration and Enforcement ........………....................10234-10234.7 Article 3.7.

Consumer Protection .............. .............…………….......... 10234.8-10234.97

Article 4. Implementation .....................................................10235-10236.8

Article 5. Inflation Escalator and Benefit Increases ............ 10237-10237.6

Historical Development of State LTC Legislation Year: 1993

SB 1943 (Mello)

Effective January 1993 Long Term Care Insurance:

1. Provides that long term care insurance include insurance designed to provide that coverage, without restriction as to length of coverage, and also includes disability based long term care policies, and specifies that long term care benefits designed to provide coverage of 12 months or more that are contained in Medicare supplement or other policies is regulated.
2. Requires associations to be organized and maintained in good faith for a primary purpose other than obtaining insurance.
3. Require associations to provide evidence that the required provisions of the constitution and bylaws have been consistently implemented.
4.  Requires certain groups to have a main resource source not related to the marketing of insurance, to have outreach methods to obtain new members not related to the solicitation of insurance and to provide benefits or services other than insurance, of significant value to its members.
5.  Requires any policy or certificate limited to institutional care to be called a nursing facility only policy or certificate, one limited to home care to be called a home care only policy or certifi­cate, and would permit only those that provide both institutional and home care to be called comprehensive long term care insurance.
6. Requires specific notice regarding untrue statements on an application.
7. Provides that where an insurer does not complete medical underwriting and resolve all reasonable questions arising from information submitted on or with an application before issuing the policy or certification, then the insurer may only rescind the policy or certificate or deny an otherwise valid claim, upon clear and convincing evidence of fraud or material misrepresentation of the risk by the applicant.
8. Provides that the contestability period is 2 years and that no long term care policy or certifi­cate may be field issued.
9. Requires long term care insurance that provides home health care benefits or home care or community-based services to provide specific benefits.
10. Provides that in every long term care policy or certificate that provide home care benefits, the threshold establishing eligibility for home care benefits shall be at least as permissive as a provision that the insured will qualify if either one of two specific criteria or combination of criteria to be substituted, if the insurer demonstrates that the interest of the insurer is better served.
11. Requires insurers to make certain reports regarding lapses and replacements.
12. Requires that premium adjustments be made for replacement policies.

Chapter 699, Statutes of 1997 Division 2., Part 2., Chapter 2.6 of the CIC:

1. Requires insurers and other marketers of long-term care insurance to utilize specified suitability standards.
2. Requires that insurers provide notifications regarding denial of claims.
3. Requires insurers to offer or provide certain rights and benefits in connection with long-term care insurance, including rights to increase and decrease benefits.
4. Imposes requirements on inflation protection benefits.

SB 1052 (Basconcellos), Chapter 699, Statutes of 1997 Division 2, Part 2., Chapter 2.6 of the CIC:

1. Requires every policy t hat is intended to be qualified long-term care contract as provided by federal law to be identified as such with a specified disclosure statement, and, similarly would require every policy that is not intended to be a qualified long-term care insurance contract as provided by federal law to be identified as such.
2. Require insurers that offer policies of certificates that are intended to be federally qualified long-term care coverage, to fairly and affirmatively concurrently offer and market policies and certificates that are not intended to be federally qualified long-term care.  The bill would revise various definitions.  Require that a specific shoppers guide be provided to prospective applicants.
3. Requires insurers to make certain reports regarding lapses and replacements.
4. Requires that premium adjustments be made for replacement policies.
5. Requires insurers and other marketers or long-term care insurance to utilize specified suitability standards.
6. Requires that insurers provide notifications regarding denial of claims.
7. Requires insurers to offer or provide certain rights and benefits in connection with long-term care insurance, including rights to increase and decrease benefits. 
8. Imposes requirements on inflation protection benefits.

AB 1483 (Gallegos)

Chapter 700, Statutes 1997 - Insurance: long-term care:

1. Requires every policy that is intended to be a qualified long-term care insurance contract as provided by federal law to be identified as such with a specified disclosure statement, includ­ing riders to life insurance policies, and, similarly would require every policy that is not in­tended to be a qualified long-term care insurance contract as provided by federal law be identified as such.
2. Requires insurers that offer policies or certificates that are intended to be federally qualified long-term care insurance policies to also fairly and affirmatively offer and market policies that are not intended to be federally qualified long-term care contracts.
3. Sets forth eligibility criteria for policies and certificates intended to be qualified long-term care insurance contracts as provided by federal law as well as for policies and certificates that are not intended to be federally qualified.
4. Revises various definitions.

SB 527 (Rosenthal)

Chapter 701, Statutes of 1997. Insurance: long-term care:

1. Provides that if an insurer provides long-term care insurance intended to qualify for favorable tax treatment under federal law, the insurer shall also offer coverage that conforms to the current state eligibility requirements, as specified.
2. Requires insurers to provide a specified notice at the time of solicitation, and a specified notice in the application form.

1998

SB 1537 (Rosenthal) 1998. Long-term care insurance:

1. Requires the Department of Insurance to adopt emergency regulations to require insurers offering both forms of policies to offer a holder of either form of policy a one-time opportunity to exchange the policy from one form into the other form, if a federal law is enacted, or the United States Department of the Treasury issues a decision, declaring that the benefits paid under long-term care insurance policies or certificates, that are not intended to be federally qualified, are either taxable or nontaxable as income.
2. Provides for the emergency regulations to require insurers to allow exchanges to be made on a guaranteed issuance basis, but to allow insurers to lower or increase the premium, with the new premium based on the age of the policyholder at the time the holder was issued the previous policy, as specified.
3. Provides for the exchange to be made by rider to a policy at the discretion of the Department, and would also provide that policies may not be exchanged if the holder is receiving benefits under the policy or would immediately be eligible for benefits as a result of an exchange.
4. 1998. Long-term care insurance: Requires insurers to take certain actions to notify holders of these policies and certificates of the availability of the exchange option.
5. Provides that those provisions apply only to a policy or certificate intended to be a federally qualified long-term care insurance contract.
6. Requires that outline to include information regarding the toll-free telephone number of the Health Insurance Counseling and Advocacy Program.
7. Provides that the cumulative premium credits allowed need not reduce the premium for the replacement policy or certificate to less than the premium of the original policy or certificate.

1999

SB 870 (Vasconcellos) 1999 Long-term care insurance:

1. Makes various changes to those provisions, including changes clarifying an insurer’s obliga­tions to file, offer, and market policies intended to be federally qualified and policies that are not intended to be federally qualified;
2. Changes mandating coverage for care in a residential care facility;
3. Changes relating to coverage for preexisting conditions; changes regarding prohibited policy provisions and prohibited insurer actions in connection with policies; and
4. Changes regarding the right of a policy or certificate holder to appeal decisions regarding benefit eligibility care plans, services and providers, and reimbursements.

SB 475 (Dunn)

Chapter 669, Statutes of 1999. Long-term care insurance: rate guide: data collection:

1. Requires the Insurance Commissioner to annually prepare a consumer rate guide for con­sumers for long-term care insurance, as specified.
2. Specifies the dates and methods for distributing the consumer rate guide.
3. Requires each insurer to provide, and the Department of Insurance to collect, specified data on long-term care policies and certificates, including all policies, whether issued by the insurer or purchased or acquired from another insurer, in the United States, on or after January 1, 1990.
4. Provides that the data collected are public records open to members of the public for inspec­tion, unless they are a trade secret as defined.

2000

SB 898 (Dunn)

Chapter 812, Statutes 2000. Long-term care renewal provisions.

1. Requires group long-term care policies and certificates to be either guaranteed renewable or noncancelable.
2. Requires approval of the Insurance Commissioner before individual or group long-term care insurance may be offered, sold, issued, or delivered in this state, and would specify the duties of insurers and Commissioner in this regard.
3. Limits premium increases for these policies, as specified.
4. Requires premium rate schedules and new policy forms to be filed with the Commissioner by January 1, 2002, for all group long-term care policies to be sold on or after January 1, 2003, and for all previously approved individual long-term care policies to be sold on or after Janu­ary 1, 2003, unless the deadline is extended by the Commissioner.

SB 2111 (Dunn)

This bill refines the provisions of SB475 for data collection and consumer rate guide. Due to these changes, the first rate guide was not available until Mid 2001.

2001

SB 455 (Speier)

Effective January 1, 2002, Chapter 328, Statutes 2001, Makes The Following Changes:

1. Restores Section 10232.65 To The Insurance Code, Which Imposes Limitations Of One Month (Two Months If Interim Coverage Is Provided) On The Amount Of Premium That May Be Collected By A Long-Term Care Policy Issuer With The Application Prior To The Time The Policy Is Delivered.
2. Requires 60-Day Notification Regarding Issuance Or Non-Issuance Of A Policy And An Interest Payment Made To Applicant For Failure To Notify.

2002

SB 1613 (Dunn)

Chapter 675, Statutes of 2002. Long-term care insurance:

1. Requires the evidence of the continuing education to be filed with and approved by the Insurance Commissioner for specified nonresident licensees.
2. Requires, until June 30, 2003, the notification to be provided within 18 months if certain conditions are met.
3. Specifies that an insurer is not prohibited from filing new group and individual policy forms with the Commissioner after January 1, 2003.
4. Authorizes an insurer that has filed premium rate schedules and new policy forms by March 1, 2002, to continue to offer and market long-term care policies approved prior to January 1, 2002, until 90 days after approval of the premium rate schedules and new policy forms or June 30, 2003.

SB 1974 (Polanco)

Insurance Policies, Chapter 358, Statutes Of 2002.

1. Authorizes The Commissioner To Approve Insurance Policies And Associated Materials In Languages Other Than English If Certain Conditions Are Satisfied.

SEC.17.25 Section 17213 is added to the Revenue and Taxation Code (see page 165-166)

IMPACT OF HIPAA ON LTCI

To summarize the principal affect of HIPAA on Long Term Care Insurance:

Federal Law gives preferential tax treatment to TQ policies.

Some persons will receive a tax deduction for all or part of the premium paid.

All persons will be relieved from the burden of possible income taxes on the benefits.

Qualified Long-Term Care Insurance

Taxpayers can include premiums paid on a qualified long-term care insurance contract for themselves, their spouse, or their dependents when figuring their deduction. But, for each person covered, they can include only the smaller of the following amounts.

The amount paid for that person.

The amount shown below - 2004 rates for year-end age. ²⁴¹

Age 40 or younger-                 $260

Age 41 to 50-                          $490 .

Age 51 to 60-                          $980

Age 61 to 70-                          $2,600

Age 71 or older-                      $3,250

Grandfathered Contracts - Replacement Issues

Agents need to do a thorough comparison of a grandfathered contract (one sold before 1/1/97) in the event that it is being replaced with another contract. There may be more favorable benefits, benefit triggers or other features that are not in a proposed contract. The standard of CIC §10235.16(d) regarding material improvement should be kept in mind.

Agents should also direct applicants to get tax advice in the event that a premium increase result in the loss of qualified status for a grandfathered contract, whether or not the contract is being replaced. Treasury has recently ruled that a premium increase does result in a material change to the contract and the loss of favorable tax treatment. That decision could change in the future based on the opposi­tion Treasury receives on that issue, but until then the ruling stands.

Possible Tax Consequences Due To “Material Modification”

When a policy or certificate holder of an insurance contract issued prior to December 31, 1996, requests a material modification to the contract as defined by federal law or regulations, the insurer, prior to approving such a request, shall provide written notice to the policy or certificate holder that the contract change requested may constitute a material modification that jeopardizes the federal tax status of the contract and appropriate tax advice should therefore be sought.²³⁴

Reporting Long-Term Care Insurance Benefits to Internal Revenue Service -1099-LTC

The 1099 form must be filed by all insurers who pay benefits from an LTC policy, whether tax qualified or not.

This form asks the insurer to indicate whether this policy was tax-qualified or not and whether benefits were paid on a per-diem or reimbursement basis.

If a policy is qualified, and has reimbursement (rather than per-diem) style benefits, nothing further is required of the insured.

However, if the policy is either TQ and per-diem, or NTQ, they must refer to the 8853 form for instructions.

1099 LTC Form & Instructions in Appendix

Reporting Long-Term Care Insurance Benefits to Internal Revenue Service - IRS Form 8853

Tax Form 8853 is used to report the amount of taxable LTC benefits when a policyholder files their tax form. It has instructions regarding reporting both benefits from TQ policies which are per diem benefits above the amount allowed by law and reporting benefits from policies which are not tax-qualified. Please review this form carefully.                                                                                                                           _

Until there are further clarifications from the US Treasury or the Congress, agents must be very cau­tious about discussing the tax implications of TQ and non-TQ policies, and should avoid venturing into the profession of being a tax adviser. Agents should recommend that applicants for long-term care insurance seek the advice of a professional tax adviser concerning the differences between TQ and non-TQ policies, how their own circumstances might affect their tax situation, and what tax conse­quences might result from any contemplated policy changes.

The IRS can be contacted by telephone at (800) TAX-FORM (1-800-829-3676) or on the World Wide  (See complete IRS Form 8853 in Appendix)   Web at www.irs.gov.

California State Tax (SB 38-9126196)

A portion of California’s SB 38 (1996) changed the tax and revenue codes to conform to recently enacted federal law that allows a deduction for medical expenses for the un-reimbursed expenses for qualified (TQ) long-term care services provided to the taxpayer, the taxpayer’s spouse or the taxpayer’s dependents if it exceeds 7.5% of adjusted gross income. Long-term care insurance premiums also must be treated as medical expenses based on a graduated scale based on the individual’s age before the close of the taxable year.

 

Medicare Information & Resources Medicare Nursing Home Compare:

http://www.medicare.gov/NhcomDare/Home.asp

Medicare Helpful Contacts:

http://www.medicare.gov/Contacts/home.asp

Medicare Long-Term Care Info:

http://www.medicare.gov/Nursing/Overview.asp The following are available on the Medicare website:

•      Medicare and You 2005

•      Medicare MSAs

•      Medical Savings Accounts

•      Medicare and Women

•      Medicare - Guide to Choosing a Medi-gap policy

•      Medicare - Guide to Choosing Long Term Care

•      Medicare Home Health Compare

STUDY QUESTIONS

 

1.  Insurance companies participating in the California Partnership for Long Term Care (Partnership)

      A.  are all California-domiciled insurance companies.

      B.  are specialty companies and not highly rated by the rating bureaus.

      C.  include only large mutual companies.

      D.  are all substantial companies, plus include CalPERS.

 

2.  There is hope that the federal government will allow additional states to begin Partnership programs and correct one of the plan’s current weaknesses,

      A.  the high premiums.

      B.  elimination of underwriting for individual policies.

      C.  reciprocity between the states so that an insured from one state would be also insured in another state

      D.  the addition of more insurers.

 

3.  CalPERS is

      A.  a large California life insurer who issued LTCI policies on a group basis only.

      B.  a self-funded employee benefit program.

      C.  a specialty insurance company who only sells individual LTCI policies.

      D.  a branch of California Partnership for LTC.

 

4.  CalPERS offers

      A.  a very limited benefit package.

      B.  new and innovative benefits, such as portability within the U.S.

      C.  an investment opportunity for insurance broke houses.

      D.  plans to nearly everyone with the exception of public employees and retirees.

 

5.  One of the features of CalPERS Partnership Plan is

      A.  dollar-for-dollar asset protection from Medicaid/Medi-Cal spend down.

      B.  it is only sold on a group basis.

      C.  it automatically offers a 7% compound inflation plan.

      D.  an integrated benefit allowance of $250,000, or $500,000.

 

6.  If an insurance prospect waits to purchase LTCI at age 40 and waits until he is 60, for coverage at age 80, using California Partnership rates,

      A.  the total cost of coverage would be nearly double.

      B.  there would be a little difference in the cost, but not enough to make it attractive.

      C.  the total cost of the coverage would be triple or more.

      D.  if inflation continues at the present rate, the difference in the total cost would be about $5,000.

 

7.  Of persons receiving long term care presently, nearly half of them are

      A.  children.

      B.  employees of large corporations.

      C.  uninsurable for life insurance.

      D.  working adults.

 

8.  The major reason why a person should not wait until they are older to purchase LTCI is

      A.  the person’s health gets worse as they get older.

      B.  they will probably make more money and won’t need LTCI.

      C.  the chances that they might need long-term care much higher at younger ages.

      D.  the way the economy and the war are right now, he may not have enough money to pay higher premiums later.

 

9.  Federal law gives preferential tax treatment to TQ policies and some

      A.  persons will not receive preferential treatment.

      B.  has an income that any more tax deductions will throw them into a higher bracket.

      C.  viatical companies will purchase those policies for the tax advantages.

      D.  will receive a tax deduction for some or all of the premiums paid.

 

10.  An IRS Form 1099

      A.  is filed by all insurers who pay benefits from an LTCI policy that is tax qualified.

      B.  is filed by all insurers who pay benefits from a non-tax qualified LTCI policy.

      C.  is never filed by an insurer unless specifically required to do so by the IRS.

      D.  is filed by all insurers who pay benefits from an LTCI policy, whether tax qualified or not.

 

ANSWERS TO STUDY QUESTIONS

1D     2C     3B     4B     5A     6A     7D     8A     9D     10D