Final Examination

Question 1 — Honor System Certification

I certify that as the agent enrolled in this continuing education course, I will complete the final exam by myself without any assistance from anyone else.

I understand that failure to comply with this requirement may result in loss of continuing education credits, and possible administrative sanctions by the Florida Department of Financial Services.

Yes — I agree and certify No

Instructions: Select the best answer for each question. Click Submit Answers when finished. A score of at least 70% (26 of 36 correct) is required to pass. Do not press the Enter key while taking this exam.

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?

custodial supervisory personal acute

Carla gives $30,000 to each of her three children. One year later, Carla applies to Medicaid for assistance in paying for nursing home care. The state’s average nursing home costs are $4,500 per month. Assuming Carla qualifies for Medicaid, Medicaid will pay Carla’s long-term care costs:

immediately beginning in 6 months beginning in 10 months beginning in 20 months

All state partnership LTC policies must be:

federally tax qualified non-tax qualified tax-qualified at the option of the state tax-qualified at the option of the insured

Agents soliciting LTC policies must complete:

8 hours of initial LTC training and 8 hours of LTC Partnership training every compliance period 4 hours of initial LTC training and 4 hours of LTC Partnership training every compliance period 8 hours of initial LTC training, including LTC Partnership training, and 4 hours of LTC training every compliance period thereafter 8 hours of LTC training, including LTC Partnership training, every compliance period

A partnership LTC policy will “shield” the insured from:

Medicaid’s asset requirements Medicaid’s income requirement Medicaid’s estate recovery rules a and c

Which of the following applicants must include “automatic inflation protection” as part of his or her LTC Partnership policy?

Chris, age 56 Pat, age 67 Lou, age 74 all partnership LTC plans must include automatic inflation protection

Which of the following provisions is the main difference between partnership qualified (PQ) LTC policies and non-PQ policies?

inflation protection guaranteed renewability free look provision tax free benefit payments

Abby Normal purchased a long-term care policy twenty years ago when she was 56. Today, she wishes to have the asset protection afforded by her state’s LTC partnership program. Which of the following courses of action will NOT provide Abby with that protection?

surrender the old policy for a new PQ policy request an endorsement on the old policy for inflation protection and new issue date continue to hold the old policy, as long as it has inflation protection, it is automatically partnership qualified either a or b

In order to enjoy the benefits of a partnership qualified LTC policy, all of the following are required EXCEPT:

the policy must be tax-qualified under HIPAA the policy must contain consumer protections based on the NAIC Model LTC Policy the insured must be a resident of the state when he or she collects policy benefits the policy must be issued after the date the state partnership plan becomes effective in the insured’s state of residence

All of the following are ways to obtain cash from the insurer of a life insurance policy EXCEPT:

viatical settlements accelerated benefits provisions cash surrender policy loans

In most LTC policies, benefits will be payable when:

a physician determines the insured needs long term care family members can no longer care for the insured the insured is discharged from the hospital and needs follow-up care the insured is deemed “chronically ill”

When issuing an individual LTC policy, the insurer may require which of the following from the applicant?

blood and urine sample an application requiring disclosure of medical history attending physician’s statement (APS) all of the above

Which of the following policy features will have the largest impact on the premium the LTC policyholder pays?

elimination period guaranteed renewability guaranteed issue guaranteed purchase option

Which inflation protection provision will result in the lowest premium cost to the policyholder?

5% simple rate 5% compound rate 5% guaranteed purchase option there is no difference in the premium cost of these options

A free look provision on a long-term care policy must be at least:

10 days 30 days 60 days 10 days but can vary from state to state

What is the minimum benefit period allowable under a NAIC Model Act policy?

one year three years five years unlimited

Which of the following properly lists levels of care from most to least intensive?

acute, supervisory, skilled, personal supervisory, acute, skilled, personal skilled, acute, personal, supervisory personal, supervisory, skilled, acute

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?

custodial care personal care respite care assisted living facilities

All of the following are true regarding tax treatment of LTC policies EXCEPT:

individuals may include LTC premiums in their itemized medical deductions benefits can be received tax free there are age limits on the deductibility of individual LTC premiums all LTC policies qualify for federal tax deduction

Approved nursing home expenses will be paid by Medicare:

0% for the first 20 days, all except $100 for the next 80 days, 100% of the last 20 days 100% for the first 20 days, all except copay for the next 80 days, 0% beyond 100 days all except the daily copay for the first 20 days, 100% of the next 80 days all except the daily copay for the first 80 days, 100% of remaining days

Which of the following is NOT a required disclosure when selling LTC policies?

Outline of Coverage Buyer’s Guide History of Rate Increases A.M. Best’s rating of the insurer

Post-claims underwriting is:

required under NAIC Model legislation a method to deny payment of claims only used when issuing group policies none of the above

All of the following are customer protections afforded by the NAIC Model legislation on LTC policies EXCEPT:

guaranteed renewability no pre-existing condition exclusions third party notification of policy lapse incontestability clause

Your client has the option of selecting a “service day” or “calendar day” method to count the elimination period. Which method will result in a higher premium?

service day calendar day both will result in the same premium it depends on other policy provisions

The expense-incurred model of benefit payments is another name for the:

reimbursement model disability model cash model indemnity model

The most commonly issued LTC policies cover:

comprehensive services services provided in nursing homes only home health care service only community-based health care services only

The 90-day certification period:

requires the inability to perform ADLs for at least 90 days to trigger benefits is the maximum elimination period allowed on LTC group certificates is the NAIC mandated waiting period on partnership policies none of the above

Assisted living facilities provide all of the following EXCEPT:

meal preparation personal care help with medication on-staff physical therapist

An agent has an ethical duty to inform prospects of which of the following?

nature of long-term care cost of long-term care levels of long-term care service all of the above

What documents should an agent retain as evidence of his or her ethical conduct?

completed fact-finding forms customer correspondence notes on conversations with clients all of the above

Prospects with low incomes and few assets should:

always buy LTC insurance generally buy LTC insurance generally not buy LTC insurance never buy LTC insurance

Which of the following is typically NOT a factor to consider when recommending replacement of an existing LTC policy?

the identity of the existing policy’s insurer whether the existing policy is tax-qualified or partnership-qualified the length of time the client has owned the existing policy the policy language of the existing policy

All of the following are true regarding a personal residence in Medicaid eligibility rules EXCEPT:

if the Medicaid applicant is not applying for LTC benefits, the value of the home does not count as an asset if the applicant moves out of the home into LTC facilities the value of the home is counted regardless of value if the Medicaid applicant is applying for LTC benefits, any home equity in excess of $100,000 counts as an asset Medicaid can place a lien against the home, even if the home is not deemed “countable”

In most states, Medicaid allows a long-term benefit applicant who is unmarried to retain countable assets totaling:

$1,500 $2,000 $3,000 $5,000

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