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.10 percent simple annual increases for the first 5 years only
b.5 percent compound or 5 percent simple annual increases, which the applicant must accept or reject in writing
c.2 percent compound annual increases
d.1 percent simple annual increases
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.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)