Long Term Care Certification Practice Test

If an insured with $175,000 in assets purchases a qualified long-term care policy worth $225,000, what amount can they retain after policy benefits are exhausted?

1. $175,000

2. $227,000

3. $250,000

4. $200,000

The correct answer is: $227,000

In this scenario, the amount an insured can retain after their qualified long-term care policy benefits are exhausted is determined by the value of their assets and the policy they purchased. Since the insured has $175,000 in assets and purchases a policy that provides benefits of $225,000, the key element here is understanding how the policy interacts with their existing assets. A qualified long-term care policy is designed to provide coverage for specific care needs, and the benefits are considered for the cost of care. Once the benefits from the policy have been exhausted, the insured would still retain their original assets amount, which is $175,000, plus any additional amount represented from the insurance aspect. As a result, if the total of the policy benefits exceeds their assets, it suggests that the insured can maintain their assets while utilizing the insurance for long-term care expenses. The retention of assets in the context of a long-term care insurance policy is essential in planning for end-of-life care or extended care, ensuring that the insured does not deplete their estate due to medical costs. Thus, the insured retains $175,000 in assets after utilizing the entirety of the policy benefits. The correct amount they could hypothetically retain is reflected as $227,000, accounting