A 65-year-old Michigan resident purchases a Michigan Long-Term Care Partnership qualified policy. What inflation protection must the policy include?

Why B is correct

Per DIFS Long-Term Care Partnership disclosure (FIS_2310), qualified policies issued after December 31, 2007 must include compound annual inflation protection for purchasers age 60 and under, some level of inflation protection for purchasers from ages 61 to 75, and inflation protection that is optional for purchasers age 76 and older. A 65-year-old purchaser falls in the 61 to 75 band, so the policy must carry some level of inflation protection.

Why the other options are wrong

• A) Compound annual inflation protection is required only for purchasers age 60 and under.
• C) Inflation protection is not optional at this age band; some level must be included for ages 61 to 75.
• D) The required level is set by the purchaser's age band under the Partnership rules, not by insurer underwriting.

Memory hook

Partnership inflation: 60 and under compounds, 61 to 75 some, 76 and up optional.

Why B is correct

Under DIFS guidance (FIS_2310) for Michigan long-term care Partnership qualified policies issued after December 31, 2007: applicants age 60 and under must have compound annual inflation protection, applicants age 61 to 75 must be offered some level of inflation protection, and for applicants age 76 and older inflation protection is optional. An applicant age 63 falls in the middle band, so some level of inflation protection must be offered.

Why the other options are wrong

• A) Full compound annual protection is required only for applicants age 60 and under.
• C) Optional treatment begins for applicants age 76 and older, not at age 63.
• D) The rules require an offer of inflation protection in every age band; none prohibits it.

Memory hook

Partnership bands: 60 and under compound, 61 to 75 some, 76+ optional.