Life & Health Insurance Exam (National Portion)Health InsuranceMedium
A client is considering a long-term care insurance policy. They want to ensure that if they recover from a period of care and later require care again, their policy benefits will be fully available without a new elimination period or waiting to meet the maximum benefit again. Which provision should they look for?
- ANonforfeiture Benefit
- BWaiver of Premium
- CRestoration of Benefits
- DInflation Protection
Show answer & explanationAnswer & explanation
Correct answer: C. Restoration of Benefits
The Restoration of Benefits provision in a Long-Term Care (LTC) policy allows the insured's maximum policy benefit amount to be restored if they recover from a period of care and later need care again, often without a new elimination period.
Why the other options are wrong
- A. Nonforfeiture Benefit provides a payout or continued coverage if the policyholder stops paying premiums.
- B. Waiver of Premium exempts the insured from paying premiums while receiving benefits.
- D. Inflation Protection increases the daily benefit amount over time to account for rising costs.
LTC Restoration of Benefits
A provision in a Long-Term Care (LTC) insurance policy that restores the insured's maximum policy benefit amount if they recover from a period of care and later require LTC services again.
- Restores the full maximum benefit amount.
- Applies after a period of recovery from care.
- Often negates the need for a new elimination period for subsequent care.
Memory trick: LTC provisions are about protecting your future care, even if you bounce back.