State RegulationsNY specificDifficulty 1/5
Under Reg 62, what does New York require of a long-term care policy with respect to nonforfeiture benefits?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 62 (11 NYCRR Part 52), Part 52.25(c)(7) prohibits an insurer from offering a long-term care policy in New York unless the policy, at the option of the insured, provides some type of nonforfeiture value, such as reduced paid-up insurance. The product must be built so the insured does not lose everything if the policy later lapses.
Why the other options are wrong
- A) Far from being prohibited, a nonforfeiture option is a required feature of New York long-term care policies.
- C) The value must be available at the insured's option; the insured decides whether to rely on it.
- D) The requirement applies to long-term care policies generally, not just to Partnership coverage.
Memory hook
No total loss on lapse: New York LTC must carry a nonforfeiture option.