State RegulationsMI specificDifficulty 2/5
A Michigan producer is explaining the state's Long-Term Care Partnership Program to a prospective buyer. Which statement accurately describes a requirement for qualified partnership policies issued after December 31, 2007?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Qualified Long-Term Care Partnership policies issued after December 31, 2007 must be tax-qualified policies, and the age-banded inflation protection rules apply: an applicant 60 or younger must receive compound annual inflation protection, while applicants 61 to 75 must receive some level of inflation protection. The Michigan Department of Insurance and Financial Services (DIFS) publishes these Partnership requirements, and the program operates within Michigan's long-term care insurance framework (M.C.L. 500.3901 to 500.3955).
Why the other options are wrong
- A) Partnership qualified policies are not exempt from Michigan's inflation protection and consumer protection requirements; those requirements are central to qualification.
- B) Partnership policies are purchased in anticipation of future need; a current need for custodial care is not a sales prerequisite.
- D) There is no channel restriction confining Partnership policies to direct-response sales; producer involvement is normal.
Memory hook
Post-2007 partnership: tax-qualified, and the young must compound their inflation protection.