760 Ind. Admin. Code 2-19.5-2
Authority: IC 27-8-12-7
Affected: IC 27-8-12
Sec. 2.
The form required by 760 IAC 2-4-2(e) is as follows:
Instructions:
This form provides information to the applicant regarding premium rate schedules, rate schedule adjustments, potential rate revisions, and policyholder options in the event of a rate increase.
Insurers shall provide all of the following information to the applicant:
Long Term Care Insurance
Potential Rate Increase Disclosure Form
The company will provide a description of when premium rate or rate schedule adjustments will be effective (for example, next anniversary date, next billing date, etc.) (fill in the blank): ________________.
This policy is Guaranteed Renewable. This means that the rates for this product may be increased in the future. Your rates can NOT be increased due to your increasing age or declining health, but your rates may go up based on the experience of all policyholders with a policy similar to yours.
If you receive a premium rate or premium rate schedule increase in the future, you will be notified of the new premium amount and you will be able to exercise at least one (1) of the following options:
§ Pay the increased premium and continue your policy in force as is.
§ Reduce your policy benefits to a level such that your premiums will not increase. (Subject to state law minimum standards.)
§ Exercise your nonforfeiture option if purchased. (This option is available for purchase for an additional premium.)
§ Exercise your contingent nonforfeiture rights*. (This option may be available if you do not purchase a separate nonforfeiture option.)
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* Contingent Nonforfeiture
If the premium rate for your policy goes up in the future and you did not buy a nonforfeiture option, you may be eligible for contingent nonforfeiture. Here is how to tell if you are eligible:
You will keep some long term care insurance coverage, if:
* Your premium after the increase exceeds your original premium by the percentage shown (or more) in the following table; and
* You lapse (not pay more premiums) within one hundred twenty (120) days of the increase.
The amount of coverage (for example, new lifetime maximum benefit amount) you will keep will equal the total amount of premiums you have paid since your policy was first issued. If you have already received benefits under the policy, so that the remaining maximum benefit amount is less than the total amount of premiums you have paid, the amount of coverage will be that remaining amount.
Except for this reduced lifetime maximum benefit amount, all other policy benefits will remain at the levels attained at the time of the lapse and will not increase thereafter.
Should you choose this Contingent Nonforfeiture option, your policy, with this reduced maximum benefit amount, will be considered "paid-up" with no further premiums due.
Example:
* You bought the policy at age sixty-five (65) and paid the one thousand dollars ($1,000) annual premium for ten (10) years, so you have paid a total of ten thousand dollars ($10,000) in premium.
* In the eleventh year, you receive a rate increase of fifty percent (50%), or five hundred ($500) for a new annual premium of one thousand five hundred ($1,500), and you decide to lapse the policy (not pay any more premiums).
* Your "paid-up" policy benefits are ten thousand dollars ($10,000) (provided you have a least ten thousand dollars ($10,000) of benefits remaining under your policy.)
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Contingent Nonforfeiture
Cumulative Premium Increase over Initial Premium
That qualifies for Contingent Nonforfeiture
(Percentage increase is cumulative from date of original issue. It does NOT represent a one-time increase.)
Issue Age | Percent Increase Over Initial Premium |
29 and under | 200% |
30-34 | 190% |
35-39 | 170% |
40-44 | 150% |
45-49 | 130% |
50-54 | 110% |
55-59 | 90% |
60 | 70% |
61 | 66% |
62 | 62% |
63 | 58% |
64 | 54% |
65 | 50% |
66 | 48% |
67 | 46% |
68 | 44% |
69 | 42% |
70 | 40% |
71 | 38% |
72 | 36% |
73 | 34% |
74 | 32% |
75 | 30% |
76 | 28% |
77 | 26% |
78 | 24% |
79 | 22% |
80 | 20% |
81 | 19% |
82 | 18% |
83 | 17% |
84 | 16% |
85 | 15% |
86 | 14% |
87 | 13% |
88 | 12% |
89 | 11% |
90 and over | 10% |
760 IAC 2-19.5-2