Long Term Care Certification Practice Test

Which factor is likely to affect the cost of a long-term care policy?

1. The age of the policyholder at purchase

2. The type of facility coverage selected

3. The frequency of premium payments

4. The length of the premium payment period

The correct answer is: The age of the policyholder at purchase

The age of the policyholder at the time of purchase significantly impacts the cost of a long-term care policy. Generally, younger individuals tend to pay lower premiums because the insurer assesses their risk based on the likelihood of needing care in the future. As a person ages, the risk of requiring long-term care increases, leading to higher premiums to offset the potential costs to the insurer. Therefore, age is a critical factor because it directly correlates with the anticipated expenses related to long-term care services. Other options, while they can influence costs to some degree, are secondary considerations. The type of facility coverage selected can affect costs, but not as directly as age; different facilities come with varying care levels and associated costs. The frequency of premium payments can be convenient but typically does not substantially influence the actual cost of the policy itself. Similarly, the length of the premium payment period may affect how long a policyholder pays premiums, but it is not as fundamental as age regarding the overall risk to the insurer and subsequent pricing of the policy.