Montana State Life Insurance Practice Exam

What must be included in the summary of an individual life policy that provides LTC benefits?

1. Only premium costs and terms

2. Guarantees related to premiums only

3. Details about benefit interactions, exclusions, and limitations

4. A general overview of life insurance policies

The correct answer is: Details about benefit interactions, exclusions, and limitations

The summary of an individual life policy that provides long-term care (LTC) benefits must include details about benefit interactions, exclusions, and limitations. This is essential because policyholders need a clear understanding of how benefits will respond in various situations, particularly when it comes to the complexities involved with long-term care. Such specifics help consumers make informed decisions regarding their coverage options and understand what is and isn’t included in their policy. Providing information about exclusions and limitations ensures that the insured is aware of scenarios in which benefits may not be payable, helping to prevent misunderstandings when a claim is made. Additionally, clarifying how different benefits may interact — for example, how LTC benefits may affect death benefits — is vital for comprehending the full scope of the policy's provisions and how they are activated. In contrast, focusing solely on premium costs or guarantees would not provide a comprehensive view of the policy's functionality or the insured's rights and obligations. A general overview of life insurance policies is too vague and does not delve into the specifics necessary for understanding the nuances of a policy that includes LTC benefits, which are critical components that impact the insured's situation.