West Virginia Code of State Rules › Agency 114 - Insurance Commission › Title 114 - LEGISLATIVE RULE INSURANCE COMMISSIONER › Series 114-32 - Long-Term Care Insurance › Appendix F

Current through Register Vol. XLI, 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 [filed][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'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 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%
[The following contingent nonforfeiture disclosure need only be
				  included for those limited pay policies to which Sections 28D(4) and 28D(6) of the
				  regulation are 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 chose 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
Percent Increase
Triggers for a Substantial Premium
				  Increase
Percent Increase
Issue Age
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.