LTC Insurance Non-Forfeiture Rider
Do you know what a ‘non-forfeiture’ rider is?
The rider is designed to ensure that if you lapse your long-term care policy (i.e., stop paying premiums) after a specified number of years, you retain some benefits from the policy. “Reduced Paid-Up Benefit” and a “Shortened Benefit Period.”
Reduced Paid-Up Benefit: if you lapse your policy after a specified number of years, the policy will continue with reduced daily benefit amounts.
Shortened Benefit Period: the policy will continue to cover the same benefits that would have been covered under your policy until the nonforfeiture benefit amount is exhausted.
In other words, the “Reduced Paid-Up Benefit” provides reduced benefits for the original term of the policy, and the “Shortened Benefit Period” provides full benefits for a reduced period of time.