South Carolina Insurance Practice Exam

An insurer is required to offer which of the following to each long-term care applicant at the time of purchase?

1. Inflation protection

2. Guaranteed renewability

3. Modified premium structure

4. Asset protection coverage

The correct answer is: Inflation protection

The correct answer is inflation protection. In South Carolina, as in many other states, insurers providing long-term care insurance are legally required to offer policyholders the option for inflation protection at the time of purchase. This provision is critical because it helps policyholders maintain the purchasing power of their benefits over time, considering that the cost of care can rise significantly due to inflation. Inflation protection can take various forms, such as automatic increases in benefit amounts each year, ensuring that the policy remains effective even as healthcare costs escalate. By offering this option, insurers promote the financial well-being of consumers who may rely on these benefits in the future. Other options, such as guaranteed renewability, while important features of long-term care insurance, are not a requirement for insurers to offer at the time of purchase. Similarly, modified premium structures and asset protection coverage may be offered by some insurers, but they are not mandated benefits that must be included with every long-term care insurance policy.