When she bought her New York long-term care policy, an insured declined the nonforfeiture benefit she was offered. Years later she can no longer afford the premiums and the policy terminates. What is the effect of her earlier decision?

Why D is correct

Under Reg 62 (11 NYCRR Part 52), the nonforfeiture benefit is what preserves reduced paid-up coverage when a long-term care policy terminates after premiums have been paid. Because this insured declined the benefit at issue, she traded that safety net for a lower premium, and the consequence arrives when the policy ends: nothing remains in force and no premium refund is owed. The choice she made at purchase controls the outcome years later.

Why the other options are wrong

• A) Paying premiums for years creates no automatic paid-up right once the insured has declined the nonforfeiture benefit that would have provided it.
• B) Continuing benefits for a period after termination comes from an extension-of-benefits provision, which is not what she elected; her coverage simply ends.
• C) No refund of premiums is due; the nonforfeiture benefit she declined was about preserving coverage, not returning money.

Memory hook

Decline nonforfeiture at issue, forfeit the paid-up cushion at lapse.