(a) This
section implements, interprets and makes specific the provisions of N.J.S.A.
17B:27E-6e in prescribing a standard format and the content of an outline of
coverage.
1. The outline of coverage shall be
a freestanding document, using no smaller than 10-point type.
2. The outline of coverage shall contain no
material of an advertising nature.
3. Text that is capitalized or underscored in
the standard format outline of coverage may be emphasized by other means that
provide prominence equivalent to the capitalization or underscoring.
4. Use of the text and sequence of text of
the standard format outline of coverage is mandatory, unless otherwise
specifically indicated.
5. Format
for outline of coverage: [CARRIER NAME]
[ADDRESS-CITY & STATE]
[TOLL FREE TELEPHONE NUMBER]
LONG-TERM CARE INSURANCE
OUTLINE OF COVERAGE
[Policy Number or Group Master Policy and Certificate
Number]
[Except for policies or certificates which are guaranteed
issue, the following caution statement, or language substantially similar, must
appear as follows in the outline of coverage.]
Caution: The issuance of this long-term care insurance
[policy] [certificate] is based upon your responses to the questions on your
application. A copy of your [application] [enrollment form] [is enclosed] [was
retained by you when you applied] [has been attached to your] [policy]
[certificate]. If your answers are incorrect or untrue, the company has the
right to deny benefits or rescind your policy. The best time to clear up any
questions is now, before a claim arises! If for any reason, any of your answers
are incorrect, contact the company at this address [insert address]
1. This policy is [an individual policy of
insurance] [a group policy] which was issued in the [Indicate jurisdiction in
which group policy was issued].
2.
PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides a very brief
description of the important features of the policy. You should compare this
outline of coverage to outlines of coverage for other policies available to
you. This is not an insurance contract, but only a summary of coverage. Only
the individual or group policy contains governing contractual provisions. This
means that the policy or group policy sets forth in detail the rights and
obligations of both you and the insurance company. Therefore, if you purchase
this coverage, or any other coverage, it is important that you READ YOUR POLICY
[OR CERTIFICATE] CAREFULLY!
3.
FEDERAL TAX CONSEQUENCES.
This [POLICY] [CERTIFICATE] is intended to be a Federally
tax-qualified long-term care insurance contract under Section 7702B(b) of the
Internal Revenue Code of 1986, as amended.
OR
Federal Tax Implications of this [POLICY] [CERTIFICATE]. This
[POLICY] [CERTIFICATE] is not intended to be a Federally tax- qualified
long-term care insurance contract under Section 7702B(b) of the Internal
Revenue Code of 1986 as amended. Benefits received under the [POLICY]
[CERTIFICATE] may be taxable as income.
4. TERMS UNDER WHICH THE POLICY OR
CERTIFICATE MAY BE CONTINUED IN FORCE OR DISCONTINUED.
(a) [For long-term care health insurance
policies or certificate describe one of the following permissible policy
renewability provisions:
(1) Policies and
certificate that are guaranteed renewable shall contain the following
statement.] RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS GUARANTEED RENEWABLE.
This means you have the right, subject to the terms of your [policy]
[certificate] to continue this [policy] [certificate] as long as you pay your
premiums on time. [Company Name] cannot change any of the terms of your
[policy] [certificate] on its own, except that, in the future, IT MAY INCREASE
THE PREMIUM YOU PAY.
(2) [Policies
and certificates that are noncancellable shall contain the following statement]
RENEWABILITY: THIS [POLICY] [CERTIFICATE] IS NONCANCELLABLE. This means that
you have the right, subject to the terms of your [policy] [certificate] to
continue this [policy] [certificate] as long as you pay your premiums on time.
[Company Name] cannot change any of the terms of your [policy] [certificate] on
its own and cannot change the premium you currently pay. However, if your
[policy] [certificate] contains an inflation protection feature where you
choose to increase your benefits, [Company Name] may increase your premium at
that time for those additional benefits.
(b) [For group coverage, specifically
describe continuation/conversion provisions applicable to the certificate and
group policy;]
(c) [Describe waiver
of premium provisions or state that there are not such provisions.]
5. TERMS UNDER WHICH THE COMPANY
MAY CHANGE PREMIUMS.
[In bold type large than the maximum type required to be used
for the other provisions of the outline of coverage, state whether or not the
company has a right to change the premium, and if a right exists, describe
clearly and concisely each circumstance under which the premium may
change.]
6. TERMS UNDER
WHICH THE POLICY OR CERTIFICATE MAY BE RETURNED AND PREMIUM REFUNDED.
(a) [Provide a brief description of the right
to return-"free look" provision of the policy.]
(b) [Include a statement that the policy
either does or does not contain provisions providing for a refund or partial
refund of premium upon the death of an insured or surrender of the policy or
certificate. If the policy contains such provisions, include a description of
them.]
7. THIS IS NOT
MEDICARE SUPPLEMENT COVERAGE. If you are eligible for Medicare, review the
Medicare Supplement Buyer's Guide available from the insurance company.
(a) [For agents] Neither [insert company
name] nor its agents represent Medicare, the Federal government or any state
government.
(b) [For direct
response] [insert company name] is not representing Medicare, the Federal
government or any state government.
8. LONG-TERM CARE COVERAGE. Policies of this
category are designed to provide coverage for one or more necessary or
medically necessary diagnostic, preventive, therapeutic, rehabilitative,
maintenance, or personal care services, provided in a setting other than an
acute care unit of a hospital, such as in a nursing home, in the community or
in the home.
This policy provides coverage in the form of a fixed dollar
indemnity benefit for covered long-term care expenses, subject to policy
[limitations] [waiting periods] and [coinsurance] requirements. [Modify this
paragraph is the policy is not an indemnity policy.]
9. BENEFITS PROVIDED BY THIS POLICY.
(a) [Covered services, related deductibles,
waiting periods, elimination periods and benefit maximums.]
(b) [Institutional benefits by skill
level.]
(c) [Non-institutional
benefits, by skill level.]
(d)
Eligibility for Payment of Benefits
[Activities of daily living and cognitive impairment shall be
used to measure an insured's need for long-term care and must be defined and
described as part of the outline of coverage.]
10. LIMITATIONS AND EXCLUSIONS.
[Describe:
(a)
Preexisting conditions;
(b)
Non-eligible facilities and provider;
(c) Non-eligible levels of care (e.g.,
unlicensed providers, care or treatment provided by a family member,
etc.);
(d) Exclusions and
exceptions;
(e) Limitations.]
[This section should provide a brief specific description of
any policy provisions which limit, exclude, restrict, reduce, delay, or in any
other manner operate to qualify payment of the benefits described in Number 6
above.]
THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH
YOUR LONG-TERM CARE NEEDS.
11.
RELATIONSHIP OF COST OF CARE AND BENEFITS.
Because the costs of long-term care services will likely
increase over time, you should consider whether and how the benefits of this
plan may be adjusted. [As applicable, indicate the following:
(a) That the benefit level will not increase
over time;
(b) Any automatic
benefit adjustment provisions;
(c)
Whether the insured will be guaranteed the option to buy additional benefits
and the basis upon which benefits will be increased over time if not be a
specified amount or percentage;
(d)
If there is such a guarantee, include whether additional underwriting or health
screening will be required, the frequency and amounts of the upgrade options,
and any significant restrictions or limitations;
(d) And finally, describe whether there will
be any additional premium charge imposed, and how that is to be
calculated.]
12.
ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN DISORDERS.
[State that the policy provides coverage for insureds
clinically diagnosed as having Alzheimer's disease or related degenerative and
dementing illnesses. Specifically describe each benefit screen or other policy
provision which provides preconditions to the availability of policy benefits
for such an insured.]
13.
PREMIUM.
[(a) State the total annual premium
for the policy;
(b) If the premium
varies with an applicant's choice among benefit options, indicate the portion
of annual premium which corresponds to each benefit option.]
14. ADDITIONAL FEATURES.
[(a) Indicate if medical underwriting is
used;
(b) Describe other important
features.]
15. CONTACT
THE STATE SENIOR HEALTH INSURANCE ASSISTANCE PROGRAM IF YOU HAVE GENERAL
QUESTIONS REGARDING LONG-TERM CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF
YOU HAVE SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE POLICY OR
CERTIFICATE.
