Long Term Care Certification Practice Test

Which of the following would likely have the highest policy premium?

1. A policy without an elimination period and a lifetime benefit period

2. A policy with a 90-day elimination period

3. A policy with a limited benefit period

4. A policy limited to skilled nursing facilities

The correct answer is: A policy without an elimination period and a lifetime benefit period

The choice that is likely to have the highest policy premium is the one that offers the most comprehensive coverage and flexibility. A policy without an elimination period means that coverage begins immediately upon the occurrence of a qualifying event, which is highly desirable for policyholders who want to ensure they have access to benefits without waiting. Furthermore, a lifetime benefit period ensures that there are no limits on the duration of time that benefits will be paid out, providing peace of mind to policyholders against the potentially high costs of long-term care that could last for many years. This extensive coverage guarantees that individuals will receive support throughout their care needs without the risk of exhausting their benefits, which inherently increases the risk for the insurance provider. Consequently, the higher level of protection and assurance offered through such a policy translates to significantly higher premiums, making it the most costly option when compared to policies with longer elimination periods, limited benefit periods, or restrictions to skilled nursing facilities. Each of those alternatives typically features reduced coverage options that can lead to lower premiums.