Competency 15 Section 5

Question 1

1. Before developing a long-term care plan with a client, it is important to gather information about the client’s family, religion, finances, and retirement goals

Answer 1

True. (LO 15-5-1)

Question 2

2. Designing a long-term care insurance policy is only one step is designing a long-term care plan.

Answer 2

True. It is important that clients understand that long-term care planning is bigger than just long-term care insurance. (LO 15-5-1)

Question 3

3. Clients should not consult their families about long-term care planning because of the sensitivity of the information and topic.

Answer 3

False. Because families are crucial to long-term care planning and are often the care provider, it is important for many clients to bring their families into the long-term care plan and have a discussion with them before they need long-term care. (LO 15-5-1)

Question 4

4. Poor health is rarely a barrier for obtaining long-term care insurance because of State Partnership Program’s relaxed underwriting requirements

Answer 4

False. It is the client’s health that buys the insurance. Underwriting for long-term care insurance can be strict and many people are not insurable. (LO 15-5-1)

Question 5

5. A short-fat long-term care insurance policy is a good option for clients looking to receive limited long-term care at home over a very long period of time.

Answer 5

False. A long-thin policy would be a good option. A short-fat long-term care insurance policy is designed to provide a lot of coverage in a short period of time. (LO 15-5-1)

Question 6

6. Getting the client to give permission to receive long-term care is a crucial part of the long-term care planning process

Answer 6

True. (LO 15-5-1)

Question 7

7. Clients with more than $2 million in assets should not consider long-term care insurance as they can self-insure.

Answer 7

False. (LO 15-5-1)

Question 8

8. There is a real risk that even wealthier clients might not have enough money to meet all of their retirement and long-term care needs.

Answer 8

True. (LO 15-5-1)

Question 9

9. Building a base long-term care insurance policy can help protect the client’s insurability and improve the affordability of the policy

Answer 9

True. (LO 15-5-1)

Question 10

10.Advisors are often approached by clients asking about long-term care insurance after an employer offers the client a group plan.

Answer 10

True. (LO 15-5-2)

Question 11

11.Group long-term care insurance plans often have stricter underwriting in order to protect the insurance company.

Answer 11

False. Often group plans have simpler underwriting. (LO 15-5-2)

Question 12

12.Group long-term care insurance policies might offer less robust home health care benefits.

Answer 12

True. Many group plans do not offer full benefits for home long-term care services. (LO 15-5-2)

Question 13

13.Group long-term care insurance plans, unlike individual plans, often have a 90 service day elimination period.

Answer 13

True. (LO 15-5-2)

Question 14

14.Group long-term care insurance plans almost always have inflation protections built into the policy.

Answer 14

False. To keep the cost of the policies down, many group plans do not come with inflation protections, but might offer them as a rider or additional option. (LO 15-5-2)

Question 15

15.Many group plans are not portable once the insured leaves his or her current job

Answer 15

False. Group plans are portable. (LO 15-5-2)

Question 16

16.Group long-term care plans are always less expensive options than individual plans because of the group rate discount

Answer 16

False. Group plans can be more expensive for clients in good health or looking to purchase a spousal benefit. (LO 15-5-2)

Question 17

17.Wealthier clients do not need or want long-term care insurance.

Answer 17

False. This is a common misconception that long-term care insurance cannot benefit wealthier clients. (LO 15-5-3)

Question 18

18.Long-term care insurance can help protect a wealthier client’s level of care

Answer 18

True. (LO 15-5-3)

Question 19

19.Long-term care risk is very difficult for an individual to predict with a great amount of accuracy.

Answer 19

True. (LO 15-5-3)

Question 20

20.Long-term care insurance can be used to protect a wealthier client’s estate and legacy.

Answer 20

True. (LO 15-5-3)

Question 21

21.If a client owns long-term care insurance, they are more likely to receive long-term care services when needed, even if they could afford them without insurance

Answer 21

True. (LO 15-5-3)

Question 22

22.Filial laws can require adult children, with sufficient income, to pay the long-term care costs of their parents

Answer 22

True. (LO 15-5-4)

Question 23

23.Nursing homes might prefer having long-term care expenses reimbursed through filial laws because private pay is often more than Medicaid.

Answer 23

True. (LO 15-5-4)

Question 24

24.Few states have passed and enacted filial laws

Answer 24

False. 30 states have filial laws. (LO 15-5-4)

Question 25

25.People who are unprepared for the costs of long-term care can pass these costs onto their children through filial laws and a diminished estate.

Answer 25

True. (LO 15-5-4)

Question 26

27. Which of the following statements regarding group long-term care insurance policies is correct? (LO 15-5-2) A. Group polices are rarely portable. B. Group policies are more expensive than individual polices for people with poor health. C. Group policies are required to have inflation protections. D. Group policies can be used to help protect a person’s insurability

Answer 26

27. The answer is D. Group policies often have less stringent underwriting requirements, allowing some clients with poor health to purchase long-term care insurance and protect their insurability

Question 27

28. Which of the following statements is true regarding filial laws? (LO 15-5-4) A. Filial laws are rarely invoked to make family members pay long-term care expenditures of a family member in a LTC facility. B. The majority of states have filial laws. C. Filial laws received new life because of the Deficit Reduction Act of 2005. D. Filial laws are designed to incentivize people to forgo long-term care insurance

Answer 27

28. The answer is B. 30 states have filial laws.

Question 28

55. Which of the following statements concerning the benefits of long-term care insurance is (are) correct? (LO 15-5-3) I. Long-term care insurance can help protect a wealthy client’s estate. II. Long-term care insurance should only be purchased by people with less than $2 million in assets. A. I only B. II only C. Both I and II D. Neither I nor II

Answer 28

55. The answer is A. There is no upper end wealth limit for long-term care insurance