Long Term Care Insurance Personal Worksheet
People buy Long Term Care Insurance for a variety of reasons. These reasons include avoiding spending assets for long term care, to make sure there are choices regarding the type of care received, to protect family members from having to pay for care, or to decrease the chances o going on Medicaid. However, Long Term Care Insurance can be expensive, and is not appropriate for everyone. State law requires the insurance company to ask you to complete this worksheet to help you and the insurance company determine whether you should buy this policy.
The premium for the coverage you are considering will be [$_______________per month, or, $_________________per year], [a one-time single premium of $_______________]
[The company cannot raise your rates on this policy. The company has a right to increase premiums in the future.]
The company has sold Long Term Care Insurance since [year] and has sold this policy since [year]. [The last rate increase for this policy in this state was in [year], when premiums went up by an average of %]. [The company has not raised its rates for this policy.]
Drafting Note: The issuer shall use the bracketed sentence or sentences applicable to the product offered. If a company includes a statement regarding not having raised rates, it must disclose the company's rate increases under prior policies providing essentially similar coverage.
THIS MUST NOW SHOW ALL RATE INCREASES IN ALL STATES ON ALL LTC POLICIES.
[ Have you considered whether you could afford to keep this policy if the premiums were raised, for example, by 20%?]
Drafting Note: The issuer shall use the bracketed sentence unless the policy is fully paid up or is a non-cancelable policy.
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Income
Where will you get the money to pay each year's premiums?
Income Savings Family Members What is your annual income? (check one)
under $10,000 [$10-20,000] [$20-30,000] [$30-50,000]Over $50,000 Drafting Note: The issuer may choose the numbers to put In the brackets to fit its eligibility standards.
How do you expect your income to change over the next 10 years? (check one)
No change Increase Decrease
If you will be paying premiums with money received only from your own income, a rule of thumb is that you may not be able to afford this policy if the premiums will be more than 7% of your income.
Not counting your home, what is the approximate value of all of your assets (savings and investments)? (check one)
Under $20,000 $20,000-$30,000 $30,000-$50,000 Over $50,000
How do you expect your assets to change over the next ten years? (check one)
Stay about the same Increase Decrease
If you are buying this policy to protect your assets and your assets are less than $30,000. you may wish to consider other options for financing your long term care.
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Disclosure Statement
The information provided above accurately describes my situation. I choose not to complete this financial Information.
Signed: ____________________________________________________________________
(Applicant)
(Date)
[I explained to the applicant the importance of completing this information.
Signed:____________________________________________________________________
(Agent)
(Date)
Agent's Printed Name: [ ]
[Note: In order for us to process your application, please return signed statement to [name of
company], along with your application.]
[My agent has advised me that this policy does not appear to be suitable for me. However, I still want the company to consider my application
Signed:_____________________________________________________________________
(Applicant)
(Date)
Drafting Note: Choose the appropriate sentences depending on whether this is a direct mail or agent sale.
The company may contact you to verify your answers.
Drafting Note: when the Long Term Care Insurance Personal Worksheet is furnished to employees and their spouse, under employer group policies, the text from the heading "Disclosure Statement" to the end of the paragraph may be removed.
If the insurer determines that the applicant does not meet its financial suitability standards or if the applicant has failed to provide the required information, the insurer may reject the application. Otherwise, the insurer will send the applicant a letter of suitability similar to the NAIC's "Long Term Care Insurance Suitability Letter" contained in the NAIC's model regulation.
Every year, the insurer is to report to the Commissioner the total number of applications it received from [the state] residents, the number of those who failed to provide information on the personal worksheet, the number of applicants who failed to meet the suitability standards and the number of applicants who chose to conform after receiving a suitability letter.