South Carolina Life and Health Practice Exam

Which type of policy typically offers lifetime benefits to the insured once they meet eligibility requirements?

1. Term life insurance

2. Whole life insurance

3. Long-term care insurance

4. Accidental death and dismemberment insurance

The correct answer is: Long-term care insurance

Long-term care insurance is designed specifically to provide coverage for services that assist individuals who cannot perform basic daily activities due to chronic illness, disability, or cognitive impairment. Once individuals meet the eligibility requirements outlined in their policy—such as needing assistance with activities of daily living (ADLs)—this type of insurance provides benefits that can last a lifetime, depending on the terms of the policy. This aspect of long-term care insurance distinguishes it from other types of insurance. For instance, term life insurance offers benefits only upon the insured’s death within a specified term, while whole life insurance provides a death benefit as well as a savings component but does not offer lifetime benefits in the sense of ongoing care services. Accidental death and dismemberment insurance also does not provide ongoing benefits but only pays a specific benefit for accidental death or covered injuries. In summary, long-term care insurance is explicitly meant to support individuals over an extended period while they navigate health challenges, which aligns perfectly with the concept of offering lifetime benefits, depending on the eligibility criteria established in the policy.