State RegulationsNY specificDifficulty 3/5
Which statement correctly distinguishes the nonforfeiture benefit from the other features of a New York long-term care insurance policy?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Reg 62 (11 NYCRR Part 52), these features do different jobs at different times. Inflation protection grows the daily benefit while the policy is in force - for example, through an option that compounds annually - so coverage keeps up with the rising cost of care. The nonforfeiture benefit, by contrast, operates when the policy ends after premiums have been paid, leaving a reduced paid-up amount of coverage rather than a total forfeiture of everything the insured paid for.
Why the other options are wrong
- B) This swaps the two features: inflation protection is the annual increase while the policy lives, and nonforfeiture is the paid-up remnant after it ends.
- C) An extension-of-benefits provision continues benefits for a limited period after coverage ends; it is a different mechanism from the reduced paid-up benefit that nonforfeiture provides.
- D) A full premium refund when care is never needed describes return-of-premium coverage, not the nonforfeiture benefit, which preserves protection rather than returning money.
Memory hook
Inflation grows the living policy; nonforfeiture saves something after it ends.