Changing Benefit Amounts in a Long Term Care Insurance Policy

Specific provisions in a typical long term care insurance policy govern your eligibility for benefits. These are defined below, with additional comment for clarification where needed.

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While You are insured, you may change benefit amounts so long as nonforfeiture coverage is not in effect. As stated in the Premiums section of this Policy, a change in benefit amounts may change the amount of premium for the Policy.

We will send you a written notice of any change in benefit amounts and the date it takes effect.

COMMENT: If you are willing to pay extra, you can develop cash values with a long term care insurance policy just as you can with many life insurance policies. In the language of the insurance industry, this is called nonforfeiture coverage. This coverage provides a dollar benefit value for the money you have paid into the policy if, for some reason, you decide to drop your long term care coverage. Without nonforfeiture coverage, you will receive nothing if you drop your coverage – even if you have paid premiums for 20 years. Because of the mathematical complications of trying to adjust nonforfeiture coverage when you change benefit amount, this type of policy does not allow you to change the benefit amount. Several different types of nonforfeiture options may be available.

Any change in benefit amount probably will result in a corresponding change in the amount of premium due.

Benefit Increase with Proof of Good Health

Specific provisions in a typical long term care insurance policy govern your eligibility for benefits. These are defined below, with additional comment for clarification where needed.

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You may, at any time, ask in writing for an increase in Your benefit amounts. We will approve the request only if You provide Us, at Your expense, with proof satisfactory to Us of Your good health. Increases in amounts are subject to Our underwriting rules and limits in effect at the time of Your request. If You have received any Benefits under this Policy, then, with regard to the Total Lifetime Benefit and the Informal Caregiver Training Maximum Benefit Amount, the percentage increase in Your Nursing Home Maximum Daily Benefit Amount will be applied to the remaining amounts. There will be no increase in the Needs Assessment Maximum Benefit Amount.

COMMENT: Any increase in benefit amounts is subject to underwriting, which means it is subject to your health at the time of the request. Whatever proof the insurance company requires (physical exam, medical history, special tests, etc.) will be at your expense.

The extra premium for this benefit increase will be based on Your age, the premium rates, and Your Health Rating at the time the increase takes effect.

The increase will take effect on the first day of the Policy Month, which starts on or next follows the date We approve Your request. We will send You a written notice of the increase in benefit amounts, the effective date of the increase and the amount of premium due. We reserve the right to require Your written approval before the change takes effect.

COMMENT: The insurance company may seek your written approval of the increase before it goes into effect to be sure you understand the added premium cost due to the increase.

Benefit Decreases

Specific provisions in a typical long term care insurance policy govern your eligibility for benefits. These are defined below, with additional comment for clarification where needed.

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You may, at any time, request in writing a decrease in Your benefit amounts. Decreases are subject to Our rules and limits in effect at the time of the request. If You have received any Benefits under this Policy, then with regard to the Total Lifetime Benefit, and the Informal Caregiver Training Maximum Benefit Amount, the percentage decrease in Your Nursing Home Maximum Daily Benefit Amount will be applied to the remaining amounts. There will be no decrease in the Needs Assessment Maximum.

Benefit Amount.

Specific provisions in a typical long term care insurance policy govern your eligibility for benefits. These are defined below, with additional comment for clarification where needed.

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The decrease will take effect on the first day of the Policy Month, whichstarts on or next follows the date We approve Your request. The Premium will decrease as of the effective date of any decrease you requested in Your benefits amounts. The amount of the premium reduction will be computed assuming that the benefit amounts purchased last are discontinued first. We will send You a written notice of the decrease in benefit amounts, the effective date of the decrease, and the amount of premium due or to be applied to future premiums. We reserve the right to require Your written approval before the change You requested takes effect.

COMMENT: Policy Month means a date measured from the Original Coverage Effective Date of the policy. For example, if the Original Coverage Effective Date of the policy is May 5, 2003, Policy Months start on the fifth day of each month. If the Original Coverage Effective Date is the 29th, 30th or 31st day of a calendar month, and a calendar month does not have that date, then the Policy Month begins on the first day of the following calendar month