South Carolina Life and Health Practice Exam

The difference between a Long Term Care Partnership Plan and a Non-Partnership Plan is which of the following?

1. Benefit limits

2. Asset Protection

3. Premium rates

4. Coverage duration

The correct answer is: Asset Protection

The distinction between a Long Term Care Partnership Plan and a Non-Partnership Plan primarily lies in asset protection. A Long Term Care Partnership Plan is designed to provide policyholders with certain benefits that ensure they can protect some of their assets when applying for Medicaid after utilizing their long-term care insurance benefits. This means that if a participant exhausts benefits from their partnership policy, they may still qualify for Medicaid without depleting all their assets, as they can receive a dollar-for-dollar asset disregard for the amount of insurance benefits they have received. In contrast, a Non-Partnership Plan does not offer this provision. Once individuals exhaust the benefits of a non-partnership policy, they typically do not have the same level of asset protection when it comes to qualifying for Medicaid. Thus, the most significant advantage of a Long Term Care Partnership Plan is the ability to safeguard a portion of one’s assets, which can be crucial in financial planning for future care needs. The other options, such as benefit limits, premium rates, and coverage duration, may vary between different plans but are not the defining characteristics that differentiate partnership plans from non-partnership plans. Therefore, the asset protection feature is what sets the Long Term Care Partnership Plan apart from the non-partnership alternative.