Code of Maryland Regulations
Title 31 - MARYLAND INSURANCE ADMINISTRATION
Subtitle 14 - LONG-TERM CARE
Chapter 31.14.02 - Long-Term Care Insurance-Premium Rates and Reserves
Section 31.14.02.08 - Long-Term Care Personal Worksheet
The disclosure required by Regulation .03J of this chapter shall read as follows:
Long-Term Care Insurance
Personal Worksheet
People buy long-term care insurance for many reasons. Some don't want to use their own assets to pay for long-term care. Some buy insurance to make sure they can choose the type of care they get. Others don't want their family to have to pay for care or don't want to go on Medicaid. But long-term care insurance may be expensive, and may not be right for everyone.
This worksheet will help you understand some important information about this type of insurance. State law requires companies issuing this to give you some important facts about premiums and premium increases and to ask you some important questions to help you and the company decide if you should buy this . Long-term care insurance can be expensive and it may not be right for everyone.
Premium Information
Policy Form Numbers____________________
The premium for the coverage you are considering will be
Type of Policy (noncancellable/guaranteed renewable):
The Company's Right to Increase Premiums:
Rate Increase History
The company has sold long-term care insurance since and has sold this policy since.
Drafting Note: A company may use the first bracketed sentence above only if it has never increased rates under any prior policy forms in this state or any other state. The issuer shall list each premium increase it has instituted on this or similar policy forms in this state or any other state during the last 10 years. The list shall provide the policy form, the calendar years the form was available for sale, and the calendar year and the amount (percentage) of each increase. The insurer shall provide minimum and maximum percentages if the rate increase is variable by rating characteristics. The insurer may provide, in a fair manner, additional explanatory information as appropriate.
Drafting Note: If the summary of premium increases is extensive, the company may disclose the required premium increase history via an addendum attached to this worksheet. The company may substitute the language below for the last sentence in the paragraph above and include the summary as an attachment to this worksheet.
"Over the past 3 years, the company has increased premiums by %. " "A summary of premium increases in the last 10 years is attached to this worksheet."
Questions Related to Your Income
You do not have to answer the questions that follow: They are intended to make sure you 've thought about how you '11 pay premiums and the cost of care your insurance doesn 't cover. If you don't want to answer these questions, you should understand that the company might refuse to insure you.
How will you pay each year's premium
[] From my Income [] From my Savings/Investments My Family will Pay [[ []Have you considered whether you could afford to keep this policy if the premiums went up, for example, by 20%
Drafting Note: The issuer is not required to use the bracketed sentence if the policy is fully paid up or is a noncancellable policy.
Could you afford to keep this if your spouse or partner dies first [] Yes []
No [] Have not thought about it [] Do not know [] Does not apply
Drafting Note: The insurer is not required to use the bracketed sentence if the policy is fully paid up or is a noncancellable policy.
What resources will you use to pay your premium[] Current income from employment [] Current income from investments [] Other current income [] Savings []Sell investments [] Sell other assets [] Money from my family [] Other
What is your annual income (check one) Under $10,000 Over $50,000
Drafting Note: The issuer may choose the numbers to put in the brackets to fit its suitability 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.
If you plan to pay premiums from your income, have you thought about how a change in your income would affect your ability to continue to pay the premium [] Yes [] No [] Don 'tknow
Will you buy inflation protection (check one) [] Yes [] No
If not, have you considered how you will pay for the difference between future costs and your daily benefit amount
[] From my Income [] From my Savings/Investments [] My Family will Pay
The national average annual cost of care in was, but this figure varies across the country. In 10 years the national average annual cost would be about if costs increase 5% annually.
Drafting Note: The projected cost can be based on federal estimates in a current year. In the above statement, the second figure equals 163% of the first figure.
What elimination period are you considering Number of days_______Approximate cost $________for that period of care.
Approximate cost of care for this period: $ ($xxx per day times number of days in, where "xxx" represents the most recent estimate of the national daily average cost of long-term care)
How are you planning to pay for your care during the elimination period (check one) [] From my Income [] From my Savings/Investments [] My Family will Pay
Questions Related to Your Savings and Investments Not counting your home, about how much are all of your assets (your savings and investments) worth (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 10 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.
Disclosure Statement
[] The answers to the questions above describe my financial situation.
Or
[] I choose not to complete this information.
(Check one.)
[] I acknowledge that the carrier and/or its agent (below) has reviewed this form with me including the premium, premium rate increase history, and potential for premium increases in the future. I understand the above disclosures. I understand that the rates for this policy may increase in the future. (This box must be checked).
Signed: (Applicant)(Date)
(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 spouses under employer group policies, the text from the heading "Disclosure Statement" to the end of the page may be removed.
