Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 2 - LONG TERM CARE INSURANCE COVERAGE › Rule 19.5 - Standard Forms › Section 19.5-2 - Potential rate increase disclosure form

Current through July 10, 2024
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
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 (for example, 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 (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%