What does the nonforfeiture benefit included in a New York long-term care insurance policy provide?

Why B is correct

Under Reg 62 (11 NYCRR Part 52), a nonforfeiture benefit protects the value of the premiums a long-term care policyholder has already paid. If the policy later ends after the required premiums have been paid, a reduced amount of paid-up coverage remains in force rather than everything being forfeited. Without this feature, an insured who paid premiums for many years could lose all protection the moment the policy terminates.

Why the other options are wrong

• A) An automatic annual benefit increase is the inflation protection option, a different feature that grows the daily benefit while the policy is in force; it does nothing once the policy has ended.
• C) Continuing benefits for a limited period after coverage ends describes an extension-of-benefits provision, a separate feature; the nonforfeiture benefit instead leaves a reduced paid-up benefit in place.
• D) A return of all premiums when no claim is made is return-of-premium coverage, a separate and costly rider; the nonforfeiture benefit is about keeping coverage in force, not refunding money.

Memory hook

Nonforfeiture: pay for years, lose the policy, keep a reduced paid-up amount of coverage.