Take the CA Partnership Quiz!

Test your knowledge of California's Best Kept LTC Secret

Since 1994, California has promoted a special long-term care insurance (LTCI) policy to consumers which offers extensive LTCI benefits backed with special consumer protection provisions. The California Partnership poolicy, which carries the California Department of Health Services' seal of approval, is so protection-rich that it's catching the attention of potential LTCI policyholders and brokers.

This is an enormous change for a policy that was once considered the Ford Edsel of LTCI policies - California Partnership policies are now among the best policies in the industry. The one-time Edsel has been replaced with a fast-moving luxury model that anyone would be proud to own!

To summarize the program, the California Partnership for Long-Term Care is an alliance between the State of California's Medi-Cal Program, private long-term care insurance companies, and Californians interested in planning for potential long-term care needs. In 1999, the Partnership redesigned its program to offer policies that are every bit as competitive as tax-qualified products. The results have been gratifying - policy sales have increased fivefold to nearly 20,000 policies sold.

Now it's time to test your knowledge of the Partnership program. You may be surprised at the information - and opportunities - you've been missing!

1) The significant difference between Partnership and tax-qualified policies generally is:
A. Partnership policies are more difficult to access benefits.
B. Partnership policies are more expensive than tax-qualified policies.
C. Partnership policies are non-qualified, and do not receive preferential tax treatment.
D. None of the Above
Answer: D. None of the above - In 1998, the California Partnership introduced policy changes that provided benefits equal to (if not better) than a participating company's traditional tax-qualified policy. Partnership policies are always tax qualified, so they receive the same preferential tax treatment of regular tax treatment of regular tax qualified policies. In addition, benefit triggers are the same between a participating company's traditional tax-qualified policy and it's partnership policy. Premiums and commisions may be the same within the same carrier.

2) One of the requirements of the Partnership is that the agent reviews the Important Notice (tax-qualified/non-qualified form) with the client at time of solicitation. True or false.
Answer: False - This document is not a requirement when presenting a Tax-Qualified Partnership policy. In fact, producers can better spend their time focusing on client needs instead of potentially confusing comparisons of tax-qualified or non-qualified plans.

3) In order to sell Partnership policies, an agent must satisfy certain continuing education requirements. Which of the following is true?
A. The required course is an eight-hour Partnership specific course.
B. The course can be taken by correspondence.
C. The course can be taken at any time as long as the agent has the insurance license.
D. The course must be taken every year if an agent has been licensed for more than 10 years. It must be taken each year during the first 10 years if the agent has been license for 10 years or fewer.
Answer: A - Before signing up for the course, producers must first complete an eight-hour California Tax Qualified course. The Partnership-specific course is also eight hours and can only be taken in a classroom environment. One of the many advantages of completing the Partnership course is that it demonstrates the producers is commited to better understanding the LTC insurance options available to the consumer.

4) The asset of protection feature afforded by a Partnership policy is:
A. Dependent on whether the Partnership policy is tax-qualified or non-qualified.
B. In place of Medi-Cal property exemption rules.
C. In addition to Medi-Cal property exemption rules.
D. Dependent on the Medi-Cal property exemption rules in force at the time of application to Medi-Cal.
Answer: C - A partnership policy allows your client to protect one dollar of assets for every dollar the policy pays out in benefits, in the event your client applies for Medi-Cal benefits or other qualifying public long-term care benefits. If your client never applies or qualifies for the Medi-Cal program, the policy would work no differently than a traditional tax-qualified policy.

5) The most important benefit of the Partnership policy is:
A. Its unique asset protection.
B. Its superior consumer protection provisions.
C. The fact that rates will never increase.
D. All of the above
Answer: B - Regardless of whether the consumer takes advantage of the asset protection provision, a Partnership policy's strongest benefits are the consumer protection provisions. Asset protection may be helpful, but the best reasons for introducing this policy to your client are the consumer protection provisions and the endorsement by the State of California.

6) Although, you must be a California resident to buy a Partnership approved LTCI policy, benefits received while outside of California will provide asset protection against Medi-Cal spend-down rules. True or false?

Answer: False - A partnership policy must be purchased in California and benefits can be used in other states. However, in order to take advantage of the asset protection feature, the policyholder would have to move back to California before becoming eligible for Medi-Cal.

7) If a person is buying a lifetime benefit period, it is unnecessary to buy a Partnership policy. True or false?

Answer: False - A client should buy a Partnership policy because it is a high-quality policy. Althrough a lifetime benefit period eliminates the chances of exhausting all of the policy benefits, it is still possible for the insured's expenses to exceed the daily or monthly benefit maximums, thereby further depleting estate assets. In addition, current California legislation provides "step-down" or "downgrade" options to policyholders. Those who purchase a lifetime benefit period today may choose to reduce the benefit period to an exhaustible amount, which makes the asset protection feature relevant.

8) One of the consumer protection features found in a Partnership policy is a mandated inflation provision, which helps to protect the policyholder against the rising costs of long-term care. Circle all that apply:
A. Compound inflation is required for applicants aged 69 and younger.
B. Simple inflation is available for applicants aged 70 and older.
C. Applicants 70 and older can forgo inflation as long as the minimum benefit is $150/day
D. Applicants can choose either simple or compound inflation riders regardless of their age.
Answer: A and B - An inflation provision is a mandated consumer protection feature found in all Partnership plans. For policyholders 69 or younger, their benefits will grow by 5% compound interest every year. Those 0 and older can choose between 5% compound and a 5% simple interest growth. Benefits will continue to grow whether or not the client is receiving benefits.

10) Changes for the initial assessment and individualized Plan of care under a Partnership plan are:
A: Considered a claim cost and count against the pool of money but are not countable towards Medi-Cal asset protection.
B. Not considered a claim cost but is countable toward Medi-Cal asset protection.
C. Not considered a claim cost, except charges for coordinating and monitoring the plan of care, which may be charged as claim costs.
D. All carriers in the Partnership program charge these costs as a administrative expense, not costs of service.
Answer: C - Care management is often a principle benefit to the owner of a California Partnership policy. Although the carriers pay for the costs for the initial assessment and individualized plan of care, charges for ongoing plan of care services can be charged against the policy's pool of money. Care management should not be confused with Case management. Care managers develop personalized plans of care for policyholders, who have the freedom to choose their own providers and services. However, care managers can help coordinate these services in a time of crisis. Care managers focus on helping policyholders and their families to make informed decisions and on responding to policyholders' cares needs.

Now, add up your score and see how you did:

- All 10 correct - Fantastic! You're a real pro at LTCI and likely have sold California Partnership policies.

- 7 to 9 correct - Impressive! You're an excellent student of the game and you really know you're stuff!

- 4 to 6 correct - Good job! You've probably just started selling LTCI and remember most of what you learned in your Partnership continuing education class!

- 1 to 3 correct - Nice try! You should avail yourself of many materials the Partnership has available, including videos, brochures, seminar assistance, etc.

The California Partnership for Long-Term Care Insurance is the best-kept secret. The program has recently gone through a number of significant changes, which have resulted in more flexible and competitvely priced policies. In some instances, the premium found in a Partnership policy can be identical to the tax premium found in that same carrier's tax-qualified policy!

Now that you have 10 new reasons to contact your client about helping to protect their assets and independence with LTCI, why wouldn't you mention the California Partnership program?

For more info about the California Partnership or to take advantage of Partnership programs and marketing materials, call (916) 323-4253, or visit the Partnership's website at www.dhs.ca.gov/cpltc .