Long Term Care Certification Practice Test

Which factor is NOT likely to increase a prospect's long-term care insurance premium?

1. Increasing elimination period

2. Previous health conditions

3. Advanced age

4. Geographical location

The correct answer is: Increasing elimination period

Choosing an increasing elimination period is a strategy often used to lower premiums for long-term care insurance. The elimination period is the time that must pass between the onset of a claim and when benefits begin. By opting for a longer elimination period, a policyholder assumes more risk, which consequently causes the insurer to lower the premium. This means that extending or increasing the elimination period effectively makes the insurance less expensive since the insurer is expected to pay out benefits less frequently. In contrast, previous health conditions, advanced age, and geographical location are all factors that typically correlate with higher premiums. Individuals with prior health issues might pose a higher risk to insurers, leading to increased costs. Similarly, advanced age often leads to higher premiums due to the increased likelihood of needing care. Finally, geographical location can affect premiums based on the cost of care in specific areas; some locations may have higher medical expenses than others, which would be reflected in insurance pricing.