State RegulationsNY specificDifficulty 2/5
A producer in Manhattan is taking an application for a long-term care policy. The applicant, after hearing the cost, says she does not want inflation protection. Under Reg 62, what should the producer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under Reg 62 (11 NYCRR Part 52), an inflation protection benefit must be offered with long-term care policies in New York at the time of sale, but the applicant decides whether to accept it. The producer's duty is to present the option so the applicant can make an informed choice; acceptance is not compulsory, although the protection raises the premium.
Why the other options are wrong
- A) The applicant may decline; the requirement is to offer the benefit, not to impose it on every buyer.
- B) Treating the offer as a silent formality defeats the disclosure purpose; the option must actually be presented to the applicant.
- C) Refusing to take the application is not required; an applicant is free to decline inflation protection.
Memory hook
Offer it, do not force it: inflation protection is the applicant's call.