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LTC Partnership Plans -- FINAL EXAM

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Indicate whether the following statement is true or false.
 

 1. 

AGENT CERTIFICATION

I certify that I am the agent enrolled in this course, and that I will complete this final examination by myself without any assistance from anyone else.  I understand that failure to comply with this requirement may result in the loss of continuing education credits and possible administrative sanctions by the Florida Department of Financial Services.
 

Multiple Choice

Identify the choice that best completes the statement or answers the question.  

.
 

 1. 

Which feature has the greatest impact on the premium the policyholder of a LTC will pay?
a.
survivor benefit
b.
daily benefit amount
c.
inflation protection
d.
elimination period
 

 2. 

John is contemplating entering a nursing home.  John contacts his insurance agent and purchases an immediate fixed annuity.  Under which circumstances would this purchase of an annuity NOT be considered an asset transfer under Medicaid’s look-back rules?
a.
John names his wife as beneficiary of the annuity
b.
John names the state as a contingent beneficiary
c.
The annuity payments are based on John’s life expectancy
d.
all of the above would exempt the annuity from the asset transfer rules
 

 3. 

Which benefit model will pay benefits regardless of the amount of long-term care expenses actually incurred by the insured?
a.
disability model
b.
cash model
c.
indemnity model
d.
all of the above
 

 4. 

Medicaid’s estate recovery system applies to assets of all deceased Medicaid beneficiaries who received
a.
nursing home services
b.
home health care services
c.
community based care
d.
all of the above
 

 5. 

Agents soliciting LTC policies must complete:
a.
8 hours of  LTC training, including LTC Partnership training, every compliance period
b.
8 hours of initial LTC training, including LTC Partnership training, and 4 hours of LTC training every compliance period thereafter
c.
8 hours of initial LTC training and 8 hours of LTC Partnership training every compliance period
d.
4 hours of initial LTC training and 4 hours of LTC Partnership training every compliance period
 

 6. 

Which of the following sources of cash requires repayment:
a.
reverse mortgage
b.
home equity loan
c.
life insurance policy loan
d.
all of the above
 

 7. 

In order to enjoy the benefits of a partnership qualified LTC policy, all of the following are required EXCEPT:
a.
the insured must be a resident of the state when he or she collects policy benefits
b.
the policy must contain consumer protections based on the NAIC Model LTC Policy
c.
the policy must be tax-qualified under HIPAA
d.
the policy must be issued after the date the state partnership plan becomes effective  in the insured’s state of residence
 

 8. 

When presenting a partnership qualified plan as a possible replacement for a recently issued tax-qualified LTC policy, which feature is most likely to be the focus of the presentation
a.
asset protection
b.
guaranteed renewability
c.
benefit limits
d.
policy exclusions
 

 9. 

Under the DRA, Medicaid imposes a look back period on asset transfers of
a.
24 months
b.
36 months
c.
48 months
d.
60 months
 

 10. 

Jake has a $100,000 partnership LTC policy.   He has been in a nursing home for two years and the policy has paid $90,000 in benefits.  He applies for Medicaid benefits in anticipation of exhausting his policy’s benefits in a couple of months.  What level of asset protection will Jake enjoy?
a.
$90,000
b.
$100,000
c.
depends on when Medicaid processes his application
d.
Jake cannot apply for Medicaid benefits before his policy is exhausted
 

 11. 

All of the following are ways to obtain cash from the insurer of a life insurance policy EXCEPT:
a.
accelerated benefits provisions
b.
viatical settlements
c.
cash surrender
d.
policy loans
 

 12. 

All of the following are reasons for expanding the LTC Partnership Program EXCEPT:
a.
educating consumers about the need, risk and cost of LTC
b.
provide tax deductions for purchasers of qualified LTC policies
c.
encourage the private LTC insurance industry
d.
curb insurance spending by Medicaid on LTC expense
 

 13. 

Post-claims underwriting is:
a.
only used when issuing group policies
b.
a method to deny payment of claims
c.
required under NAIC Model legislation
d.
none of the above
 

 14. 

Which of the following is NOT an ADL?
a.
continance
b.
taking medication
c.
transference
d.
bathing
 

 15. 

Medicare Part A covers nursing home care only if
a.
skilled care is provided
b.
the care is certified as  medically necessary by a physician
c.
the patient has been hospitalized for at least 3 days in the previous month
d.
all of the above are required for Medicare to cover nursing home care
 

 16. 

Which of the following are true regarding Medicare Supplement (Medigap) policies?
a.
Medigap pays for types of care Medicare won’t cover, e.g., personal care
b.
Medigap pays for care in more expensive facilities or those not Medicare certified
c.
Medigap pays co-pays and deductibles Medicare imposes
d.
Medigap pays for nursing home care beyond the 100 covered by Medicare
 

 17. 

Assisted living factilities provide all of the following EXCEPT:
a.
on-staff physical therapist
b.
help with medication
c.
meal preparation
d.
personal care
 

 18. 

A life settlement is closely related to:
a.
policy loans
b.
viatical settlements
c.
policy surrender
d.
accelerated benefits
 

 19. 

Which of the following is an example of community based care?
a.
assisted living residences
b.
respite care
c.
adult day care
d.
home health care
 

 20. 

What period is also known as the deductible period?
a.
accumulation period
b.
benefit period
c.
probationary period
d.
elimination period
 

 21. 

Which of the following is typically NOT a factor to consider when recommending replacement of an existing LTC policy?
a.
the length of time the client has owned the existing policy
b.
the policy language of the existing policy
c.
whether the existing policy is tax-qualified or partnership-qualified
d.
the identity of the existing policy’s insurer
 

 22. 

Martina bought a partnership policy at age 65.  Her policy must provide:
a.
simple inflation protection
b.
compound inflation protection
c.
some level of inflation protection
d.
no inflation protection is required, but the policy can be sold
 

 23. 

A wealthy client reviews your sales presentation for a tax-qualified state partnership LTC policy and decides that the premium is rather high, and chooses to “self-insure” the risk instead.  Which of the following is (are) true?
a.
This is a good method to maximize the size of the estate he can leave to heirs
b.
The client exposes himself to uncapped liability
c.
both a and b are true
d.
neither a nor b are true
 

 24. 

Who is able to determine when long-term care is needed?
a.
physician
b.
nurse
c.
medical social worker
d.
all of the above
 

 25. 

Which inflation protecton provison will result in the lowest premium cost to the policyholder?
a.
5% compound rate
b.
5% guaranteed purchase option
c.
5% simple rate
d.
there is no difference in the premium cost of these options
 

 26. 

Which of the following is a non-countable asset in Medicaid’s eligibility requirements?
a.
life insurance
b.
family burial plot
c.
collectibles
d.
qualified retirement plans
 

 27. 

The purchaser of a partnership LTC policy should be aware that:
a.
Medicaid benefits are not automatic
b.
Medicaid does not provide the same level of LTC services as the partnership policy may provide
c.
a partnership LTC policy may be more costly thatn a non-partnership policy
d.
all of the above
 

 28. 

Juanita has a partnership qualified LTC policy and wishes to change the level of coverage from comprehensive coverage to a facilities-only plan as a way to reduce premium costs.  Under the Deficit Reduction Act, such a change:
a.
is permitted, by the policy loses is partnership status
b.
is not permitted, although a change from facilities-only to comprehensive plan would be
c.
is permitted, provided inflation protection is retained
d.
is not permitted
 

 29. 

What is the minimum benefit period allowable under a NAIC Model Act policy?
a.
one year
b.
three years
c.
five years
d.
unlimited
 

 30. 

Federal guidelines require state Medicaid programs to provide which of the following to eligible applicants?
a.
nursing home care service
b.
home health care services
c.
community based care services
d.
all of the above
 

 31. 

The cost of assisted living facilities is generally:
a.
the same as that at nursing home
b.
more than that of a nursing home
c.
less than that of a nursing home
d.
the same as that of a hospital stay
 

 32. 

An insured needs assistance with bathing and dressing, as well as help with light housework and laundry, but is not in need of round-the-clock assistance.  What level of care does this insured need?
a.
acute
b.
supervisory
c.
personal
d.
custodial
 

 33. 

Which of the following is a standardized form that asks questions related to the suitability of a LTC product for a prospective applicant?
a.
personal worksheet
b.
application
c.
Outline of Coverage
d.
Buyer’s Guide
 

 34. 

Which two ADLS are the most likely to be lost first?
a.
bathing and dressing
b.
transferrance and eating
c.
toileting and eating
d.
toileting and continance
 

 35. 

A terminally ill insured needing assistance bathing, dressing and eating would most likely rely on:
a.
respite care
b.
home health care
c.
custodial care
d.
hospice care
 

 36. 

Continuing Care Retirement Communities (CCRCs):
a.
offer a wide range of home-care services at one fixed rate
b.
are another name for assisted living facilities
c.
tie fees to the level of services provided
d.
provide personal and skilled in-home care
 

 37. 

Which of the following provisions is the main difference between partnership qualified (PQ) LTC policies and non-PQ policies?
a.
tax free benefit payments
b.
free look provision
c.
guaranteed renewability
d.
inflation protection
 

 38. 

Joann has been caring for her aged parents and has become exhausted.  Her physician recommends that she take a break from caregiving. What type of care is most appropriate?
a.
respite care
b.
custodial care
c.
personal care
d.
assisted living facilities
 

 39. 

What documents should an agent retain as evidence of his or her ethical conduct?
a.
customer correspondence
b.
completed fact-finding forms
c.
notes on conversations with clients
d.
all of the above
 

 40. 

What is required of a state that wishes to implement an LTC Partnership program?
a.
amendment of state insurance laws to exempt certain assets equal to LTC benefits from Medicaid eligibility requirements
b.
amend state laws to permit the sale of tax qualified LTC policies within that state
c.
amendment of Medicaid laws to exempt certain assets equal to LTC benefits from Medicaid eligibility requirements
d.
all of the above
 

 41. 

Purchasers of partnership qualified LTCI:
a.
may protect their assets and income from Medicaid eligibilty requirements
b.
locks in current Medicaid eligibility requires relating to assets, but not income
c.
automatically qualify for Medicaid benefits once their policy’s benefits are exhausted
d.
none of the above
 

 42. 

Which of the following applicants must include “automatic inflation protection” as part of his or her LTC Partnership policy?
a.
Chris, age 56
b.
Lou, age 74
c.
Pat, age 67
d.
all partnership LTC plans must include automatic inflation protection
 

 43. 

A free look provision on a long-term care policy must be at least
a.
60 days
b.
10 days
c.
30 day
d.
10 days but can vary from state to state
 

 44. 

The most commonly issued LTC policies cover:
a.
home health care service only
b.
comprehensive services
c.
community-based health care services only
d.
services provided in nursing homes only
 

 45. 

An “Agent’s Report” contains which of the following
a.
the completed application, signed disclosure documents, and the first premium check
b.
medical information collected by the agent
c.
material facts not disclosed in the application
d.
all of the above
 

 46. 

Asset transfers for less than fair market value (gifts, bargain sales, etc.) will be subject to which of the following under Medicaid’s look back rules?
a.
disallowance of the transfer
b.
10% penalty on the difference between fair market value and transfer value
c.
penalty period
d.
all of the above
 

 47. 

In most LTC policies, benefits will be payable when:
a.
family members can no longer care for the insured
b.
a physcian determines the insured needs long term care
c.
the insured is deemed “chronically ill”
d.
the insured is discharged from the hospital and needs follow-up care
 

 48. 

The 90-day certification period:
a.
is the NAIC mandated waiting period on partnership policies
b.
is the maximum elimination period allowed on LTC group certificates
c.
requires the inability to perform ADLs for at least 90 daysto trigger benefits
d.
none of the above
 

 49. 

Which of the following are factors to consider when contemplating a partnership LTC policy?
a.
possible changes in the Medicaid eligibility rules
b.
possible discontinuance of the state in the partnership program
c.
possible relocation of the insured in the future
d.
all of the above
 

 50. 

Which of the following could have a negative impact on an insurance plan that relies on a partnership LTC to meet the client’s LTC goals?
a.
the client has a high level of income
b.
the client purchases a partnership policy with a long benefit period
c.
the client has relatively few assets
d.
all of the above
 



 
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