Wisconsin Administrative Code › Office of the Commissioner of Insurance › Chapter Ins 3 - Casualty Insurance › Appendix 5

Current through June 24, 2024
LONG-TERM CARE INSURANCE POTENTIAL RATE INCREASE
				DISCLOSURE FORM
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:
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 [filed] 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 policy 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've 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 at
				least $10,000 of benefits remaining under your policy.)
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%
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%
[The following contingent nonforfeiture disclosure need only be
				included for those limited pay policies to which sub. (19) (j) is
				applicable.]
In addition to the contingent nonforfeiture benefits described
				above, the following reduced "paid-up" contingent nonforfeiture benefit is an
				option in all policies that have a fixed or limited premium payment period,
				even if you selected a nonforfeiture benefit when you bought your policy. If
				both the reduced "paid up" benefit AND the contingent benefit described above
				are triggered by the same rate increase, you can choose either of the two
				benefits.
You are eligible for the reduced "paid up" contingent
				nonforfeiture benefit when all three conditions shown below are met:
1. The premium you are required to pay after the increase
				exceeds your original premium by the same percentage or more shown in the chart
				below;
Triggers for a Substantial Premium
							 Increase
Issue Age
Percent Increase Over Initial
							 Premium
Under 65
50%
65-80
30%
Over 80
10%
Triggers for a Substantial Premium Increase
Issue Age
Percent Increase Over Initial Premium
Under 65
50%
65-80
30%
Over 80
10%
2. You stop paying your premiums within 120 days of when the
				premium increase took effect; AND
3. The ratio of the number of months you already paid premiums
				is 40% or more than the number of months you originally agreed to pay.
If you exercise this option, your coverage will be converted to
				reduced "paid-up" status. That means there will be no additional premiums
				required. Your benefits will change in the following ways:
a. The total lifetime amount of benefits your reduced paid up
				policy will provide can be determined by multiplying 90% of the lifetime
				benefit amount at the time the policy becomes paid up by the ratio of the
				number of months you already paid premiums to the number of months you agreed
				to pay them.
b. The daily benefit amounts you purchased will also be
				adjusted by the same ratio.
If you purchased lifetime benefits, only the daily benefit
				amounts you purchased will be adjusted by the applicable ratio.
Example:
·
You bought the policy at age 65 with an annual
				premium payable for 10 years.
·
In the sixth year, you receive a rate increase
				of 35% and you decide to stop paying premiums.
·
Because you have already paid 50% of your total
				premium payments and that is more than the 40% ratio, your "paid-up" policy
				benefits are .45 (.90 times .50) times the total benefit amount that was in
				effect when you stopped paying your premiums. If you purchased inflation
				protection, it will not continue to apply to the benefits in the reduced
				"paid-up" policy.