Illinois Administrative Code
Title 50 - INSURANCE
Part 2012 - LONG-TERM CARE INSURANCE
Section 2012.127 - Nonforfeiture Benefit Requirement
Current through Register Vol. 48, No. 12, March 22, 2024
a) This Section does not apply to life insurance policies or riders containing accelerated long-term care benefits.
b) To comply with the requirement to offer a nonforfeiture benefit pursuant to Section 2012.86 of this Part:
c) If the offer required to be made under Section 2012.86 is rejected, the insurer shall provide the contingent benefit upon lapse described in this Section. Even if this offer is accepted for a policy with a fixed or limited premium paying period, the contingent benefit upon lapse in subsection (d)(3) shall still apply.
d) After rejection of the offer required under Section 2012.86, for individual and group policies without nonforfeiture benefits, the insurer shall provide the contingent benefit upon lapse:
Triggers for a Substantial Premium Increase
Issue Age |
Percent Increase Over Initial Premium |
-54 and under |
100% |
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% |
Triggers for a Substantial Premium Increase
Issue Age |
Percent Increase Over Initial Premium |
Under 65 |
50% |
65-80 |
30% |
Over 80 |
10% |
This provision shall be in addition to the contingent benefit provided by subsection (d)(2) and, when both are triggered, the benefit provided shall be at the option of the insured.
e) Benefits continued as nonforfeiture benefits, including contingent benefits upon lapse in accordance with subsection (d)(2), but not subsection (d)(3), are described as follows:
f) All benefits paid by the insurer while the policy or certificate is in premium paying status and in the paid up status will not exceed the maximum benefits which would have been payable if the policy or certificate had remained in premium paying status.
g) There shall be no difference in the minimum nonforfeiture benefits as required under this Section for group and individual policies.
h) The requirements of this Section shall apply to any long-term care policy issued in this State, and shall apply as follows:
i) Premiums charged for a policy or certificate containing nonforfeiture benefits or a contingent benefit on lapse shall be subject to the loss ratio requirements of Sections 2012.110, 2012.112 or Section 2012.113, whichever is applicable, treating the policy as a whole.
j) To determine whether contingent nonforfeiture upon lapse provisions are triggered under subsection (d)(2) or (d)(3), a replacing insurer that purchased or otherwise assumed a block or blocks of long-term care insurance policies from another insurer shall calculate the percentage increase based on the initial annual premium paid by the insured when the policy was first purchased from the original insurer.
k) A nonforfeiture benefit for qualified long-term care insurance contracts that are level premium contracts shall be offered that meets the following requirements: