Requirement to Offer Inflation Protection

Requirement to Offer Inflation Protection A. No insurer may offer a long-term care insurance policy unless the insurer also offers to the policyholder the option to purchase a policy that provides for benefit levels to increase with benefit maximums or reasonable durations which are meaningful to account for reasonably anticipated increases in the cost of long-term care services covered by the policy. Insurers must offer to each policyholder, at the time of purchase, the option to purchase a policy with an inflation protection feature no less favorable than one of the following: 1. Increases benefit levels annually, (in a manner so that the increases are compounded annually); 2. Guarantees the insured individual the right to periodically increase benefit levels without providing evidence of insurability or health status so long as the option for the previous period has not been declined; or 3. Covers a specified percentage of actual or reasonable charges. B. Where the policy is issued to a group, the required offer in Subsection A above shall be made to the group policyholder; except, if the policy is issued to a group defined in Section 4E(4) of this Regulation, other than to a continuing care retirement community, the offering shall be made to each proposed certificate holder. C. The offer in Subsection A above shall no be required of: 1. Life insurance policies or riders containing accelerated long-term care benefits, nor 2. Expense incurred long-term care insurance policies. D. Insurers shall include the following information in or with the outline of coverage: 1. A graphic comparison of the benefit levels of a policy that increases benefits over the policy period with a policy that does not increase benefits. The graphic comparison shall show benefit levels over at least a twenty (20) year period. 2. Any expected premium increases or additional premiums to pay for automatic or optional benefit increases. If premium increases or additional premiums will be based on the attained age of the applicant at the time of the increase, the insurer shall also disclose the magnitude of the potential premiums the applicant would need to pay at ages 75 and 85 for benefit increases. 3. An insurer may use a reasonable hypothetical, or a graphic demonstration, for the purposes of this disclosure.