Illinois Health Insurance Practice Exam

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Under what circumstances can rates increase in a Long-Term Care (LTC) policy?

Based on individual policyholder health status
As a response to overall market trends
Through cancellation of the policy by the insurer
By adjusting rates for broad policy classifications

The correct answer is: By adjusting rates for broad policy classifications

Rates for Long-Term Care (LTC) policies can increase by adjusting rates for broad policy classifications. This means that rate adjustments are typically based on the entire group of policyholders who share similar characteristics, rather than an individual policyholder's health status. The insurer may increase rates for an entire category of policyholders to reflect changing costs, claims experience, or other factors that impact the overall risk pool. This practice helps ensure that the premiums charged remain appropriate for the level of coverage provided. Additionally, increasing rates in response to overall market trends or canceling policies are not typical circumstances for rate increases in LTC policies.