Long Term Care Certification Practice Test

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Prepare for the Long Term Care Certification Exam. Use flashcards and multiple choice questions, with each question offering hints and explanations. Ace your exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

If an applicant chooses a long-term care policy with a longer elimination period and a short benefit period, what is the likely impact on the premium amount?

The premium will increase significantly
The premium will be raised slightly
The premium will be unchanged
The premium will be lowered due to the long elimination period and short benefit period

The correct answer is: The premium will be lowered due to the long elimination period and short benefit period

Choosing a long-term care policy with a longer elimination period and a shorter benefit period typically results in a lower premium amount. The elimination period is the time that must pass before benefits begin, which means the insurer will not have to pay out claims during this time. A longer elimination period reduces the insurance company's risk and potential payout, leading to lower premiums. Similarly, a shorter benefit period reduces the duration of time that the policy will pay out benefits. This further decreases the insurer's financial exposure since they will be liable for a shorter timeframe. Consequently, both of these factors combined – a longer elimination period and a shorter benefit period – make the policy less costly for the insurer, which translates into a reduced premium cost for the policyholder.