Arizona Administrative Code › Title 20 - COMMERCE, FINANCIAL INSTITUTIONS, AND INSURANCE › Chapter 06 - DEPARTMENT OF INSURANCE AND FINANCIAL INSTITUTIONS - INSURANCE DIVISION › Article 10 - LONG-TERM CARE INSURANCE › Appendix B - Long-term Care Insurance Potential Rate Increase Disclosure Form

Current through Register Vol. 30, No. 28, July 12, 2024
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
1.
[Premium Rate] [Premium Rate Schedules]
:
				  [Premium rate] [Premium rate schedules] that [is][are] applicable to you and
				  that will be in effect until a request is made and [approved] for an increase
				  [is][are] [on the application][$_____])
2.
The [premium] [premium rate schedule] for this
				  policy [will be shown on the schedule page of] [will be attached to] your
				  policy
.
3.
Rate Schedule Adjustments
:
The company will provide a description of when premium rate
				  or rate schedule adjustments will be effective (e.g., next anniversary date,
				  next billing date, etc.) (fill in the blank): __________________.
4.
Potential Rate Revisions
:
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 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.)
*Contingent Nonforfeiture
If the premium rate for your policy goes up in the future and
				  you didn't buy a nonforfeiture option, you may be eligible for contingent
				  nonforfeiture. Here's 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 120 days of the
				  increase.
The amount of coverage (i.e., 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've 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 65 and paid the $1,000 annual
				  premium for 10 years, so you have paid a total of $10,000 in premium.
* In the eleventh year, you receive a rate increase of 50%,
				  or $500 for a new annual premium of $1,500, and you decide to lapse the policy
				  (not pay any more premiums).
* Your "paid-up" policy benefits are $10,000 (provided you
				  have a least $10,000 of benefits remaining under your policy.)
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%