Disability & Long-Term CareQuestion 98 of 315
What inflation protection must a California LTC insurer offer to each applicant for a new individual long-term care policy?
a.1 percent simple annual increases
b.2 percent compound annual increases
c.10 percent simple annual increases for the first 5 years only
d.5 percent compound or 5 percent simple annual increases, which the applicant must accept or reject in writing
Explanation
California requires insurers to offer inflation protection on every new LTC policy, most commonly as 5 percent compound or 5 percent simple annual increases. The applicant must be given the opportunity to accept or reject the offer in writing; the offer itself cannot be skipped.
Law Reference: Cal. Ins. Code §10237.1Practice all 315 questions free — no signup required.
Related questions on this topic
- An insured has advanced Alzheimer's disease and can still physically perform all six activities of daily living without assistance. Are they eligible for benefits under a tax-qualified long-term care policy?
- A long-term care policy that pays a flat $200 daily amount whenever benefits are triggered, regardless of the actual cost of care, is BEST described as:
- Under the California Long-Term Care Insurance Reform Act, an applicant for an individual LTC policy has how many days to return the policy for a full refund of premium?
- In California, a long-term care policy may NOT exclude a pre-existing condition for more than how long after the policy's effective date?
- The MAIN consumer benefit of buying a California Partnership for Long-Term Care policy, rather than an ordinary LTC policy, is:
- Compared with a non-tax-qualified long-term care policy, a federally tax-qualified LTC policy:
Last reviewed: · editorial process
PrepPass Editorial Team · Verified against California Life & Health Insurance License Exam · How we review