Question

Which of the following statements is true regarding LTC insurance?

a) Every policy must offer reduced paid-up insurance to the applicant.
b) LTC policies may not include any riders.
c) LTC policies must allow a 60-day free-look period.
d) Every policy must offer nonforfeiture benefits to the applicant.

Answer 1

The correct statement is that LTC insurance policies must offer a 60-day free-look period, allowing policyholders to review and possibly cancel their policy for a full refund. Hence, option (c) is correct.

Step-by-step explanation:

The true statement regarding Long-Term Care (LTC) insurance is that LTC policies must allow a 60-day free-look period. This is a consumer protection feature that affords the policyholder a specified period of time to review the policy and decide if they wish to keep it or cancel it for a full refund. LTC policies can include riders, which are additional benefits that can be added to the policy, and not every policy is required to offer reduced paid-up insurance or nonforfeiture benefits to the applicant.

Nonforfeiture benefits allow a policyholder some type of benefit even if they let their policy lapse, while reduced paid-up insurance refers to a life insurance policy feature that enables the policyholder to maintain a reduced amount of coverage without having to pay further premiums.