core standards for individual long term care insurance policies

Date: 7/13/10
Under review by the Product Standards Committee
Higlighted changes are those added since the 7/6 draft.
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%
(b)
The policy shall also indicate that a contingent benefit on lapse will also be triggered for an
insured for policies with a fixed or limited premium paying period every time the company
increases the premium rate schedule (issue age or modified) to a level that results in a cumulative
increase in the premium rate schedule for the insured equal to or exceeding the percentage of the
insured’s initial premium rate schedule set forth below based on the insured’s issue age, the policy
lapses within 120 days of the due date of the premium rate schedule so increased, and the ratio in
Item (4)(d)(ii) is forty percent (40%) or more. The owner shall be notified at least sixty (60) days
prior to the due date of the premium reflecting the premium rate schedule increase.
__________Triggers for a Substantial Premium Increase__________
Percent Increase
______Issue Age_____ _____ Over Initial Premium Rate Schedule
Under 65 50%
65-80 30%
Over 80 10%
This provision shall be in addition to the contingent benefit provided by Item (4)(a) above and
where both are triggered, the benefit provided shall be at the option of the insured.
(c)
The policy shall indicate on or before the effective date of a substantial premium increase as
defined in Item (4)(a) above, the company shall:
(i)
Offer to reduce policy benefits provided by the current coverage without the requirement
of additional underwriting so that required premium payments are not increased;
Drafting Note: The insured’s right to reduce policy benefits in the event of the premium increase shall not affect
any other right to elect a reduction in benefits provided under the policy.
© IIPRC 2010 19