Long Term Care Certification Practice Test

An insured needs to access benefits provided by a long-term care policy she purchased 10 years prior. The daily benefit amount is inadequate so the insured increases the coverage and foregoes underwriting procedures. Which option within the policy is allowing her to increase the benefit amount?

1. Automatic inflation protection

2. Guaranteed Purchased option

3. Rider addition

4. Conversion option

The correct answer is: Guaranteed Purchased option

The correct answer, which allows the insured to increase the benefit amount without undergoing underwriting procedures, is the Guaranteed Purchase Option. This provision in long-term care policies enables policyholders to increase their coverage at specified intervals, typically without needing to provide evidence of insurability or go through additional underwriting. This is particularly beneficial for individuals who may have developed health issues over time and would otherwise be unable to secure additional coverage. The Guaranteed Purchase Option not only provides flexibility to adjust coverage as needs change—such as when the daily benefit amount becomes insufficient—but it also ensures that the insured can do so without facing potential barriers that could arise from health changes. This option is crucial for maintaining adequate long-term care coverage over the years. Contextually, while automatic inflation protection typically adjusts benefits over time according to inflation rates, it does not provide a straightforward mechanism to increase the benefit amount at the policyholder's discretion. Rider addition usually involves adding specific riders to an existing policy, which might still require underwriting or could limit the benefits being increased. A conversion option generally pertains to transferring coverage from one policy to another rather than modifying existing benefits directly within the long-term care policy. Thus, the Guaranteed Purchase Option stands out as the most relevant and applicable choice for the insured in this scenario