State RegulationsNY specificDifficulty 2/5
A New York agent asks why the disclosure illustration for the long-term care policy she is showing a client must span two decades with benefit examples at advanced ages. The best explanation is that the requirement exists to:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Reg 62 (11 NYCRR Part 52), the disclosure illustration - covering a 20-year period with benefit examples at ages 75 and 85 - is built around the reality that long-term care claims typically arrive many years after purchase. Forcing the illustration out over that long horizon lets the applicant see how the policy performs when it will most likely be used, instead of being sold on a flattering first-year snapshot.
Why the other options are wrong
- A) Tax qualification is a separate federal matter; the illustration rule is a New York consumer-disclosure requirement, not a tax test.
- B) Illustrations are projections shown to the applicant; they are not a mechanism for repricing the contract after it is issued.
- D) Medical history belongs in the underwriting file gathered with the application, not in the benefit illustration the regulation requires.
Memory hook
LTC illustrations look twenty years out because that is when the claim usually shows up.