4. Afra Jenners financial planner determined that Afra needs to purchase a long-term care policy.

a. If Afra expects her expenses to fluctuate month-to-month in the event she was to need longterm

care assistance, which policy type should her financial planner recommend?

b. To prepare for the possibility of needing long-term care assistance, Afra has been gifting

assets to family, friends, and charitable organizations. Which of the following asset transfers

will most likely trigger a Medicaid to consider the transfer non-exempt?

A gift of $50,000 in home equity to her husband.

A $35,000 gift of stock to her church six years ago.

A $100,000 transfer of bank assets to her daughter four years ago.

A $25,000 gift of clothing and household items to Goodwill two years ago.

c. After reviewing the cost of long-term care coverage, Afra is reluctant to buy a LTC policy.

She may be willing to buy a policy if the premium can be reduced. When choosing between

extending the elimination period or increasing the benefit period, which will reduce her

annual premium?

d. Afras husband, Rex, believes that insurance of any type is a rip-off. He worries that if he

does not need LTC care, all the premiums paid will have been for nothing. However, he

does not want to pay 100 percent of LTC costs if he needs care. What policy provision can

Rex add to a policy that will provide some piece of mind?