Connecticut Administrative Code
Title 38a - Insurance Department
458 - Life Insurance Providing Long-Term Care Benefits
Section 38a-458-5 - Disclosures

Universal Citation: CT Reg of State Agencies 38a-458-5

Current through September 9, 2024

(a) Descriptive title. The face of a policy providing long-term care benefits shall contain the following:

(1) a description of coverage which uses the terminology "long-term care benefits";

(2) the following statement: "Benefits as specified under this life insurance policy or annuity contract will be reduced upon receipt of long-term care benefits."

(b) Tax consequences. Disclosure is required, at the time of application and at the time the long-term care benefits payment request is submitted, of the potential tax implications of receiving this payout. The disclosure statement shall indicate the extent to which the receipt of long-term care benefits may be taxable and that the insured should seek assistance from his personal tax advisor. Such disclosure shall be prominently displayed in bold-face type on the first page of the policy or rider and any other related documents.

(c) Solicitations.

(1) Prior to or concurrently with the application, the applicant shall be given a written disclosure including, but not necessarily limited to, a brief description of the long-term care benefits and an explanation of any effect of the payment of the benefits on the policy's cash value, accumulation account, death benefit, premium, policy loans and policy liens. In the event of direct mail solicitations, the disclosure shall be made upon acceptance of the application.

(2) In addition, if there is a premium or cost of insurance charge, the applicant shall also be given a generic illustration numerically demonstrating any effect the payment of benefits will have on the policy's cash value, accumulation account, death benefit, premium, policy loans and policy liens. In the event of direct mail solicitations, the disclosure shall be made at the time of solicitation or upon acceptance of the application.

(d) Effect of the benefits payment. When a policyowner or certificate holder requests long-term care benefits, the insurer shall send a statement to the policyowner, certificate holder, assignee and irrevocable beneficiary showing any effect that the payment of the long-term care benefits will have on the policy's cash value, accumulation account, death benefit, premium, policy loans and policy liens. The statement shall disclose what adverse affect, if any, the actual or constructive receipt of the long-term care benefits payments may have on the recipient's eligibility for Medicaid or other government benefits or entitlements. When a previous disclosure statement becomes invalid as a result of a long-term care benefits payment, the insurer shall send a revised disclosure statement to the policyowner, certificate holder, assignee and irrevocable beneficiary. When the insurer agrees to pay long-term care benefits, the insurer shall issue a new or amended schedule page to the policy to reflect any new, reduced in-force face amount of the contract.

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