Starting August 21, 2017 new procedures will take effect for long term care insurance policyholders who wish to reduce their Benefit Increase Option (BIO) to an available level or remove their BIO entirely.
For all policies issued prior to October 1, 2007:
- New: If reducing BIO: We will allow policyholders to retain their increased daily benefit amount (DBA). The new premium is calculated using original issue age, policy effective date and a new starting DBA that would have been required with the reduced BIO percentage to reach the policyholder’s current increased DBA.
- No Change: If removing BIO: We will allow policyholders to retain their current increased DBA. The new premium is calculated based on the current original DBA at issue age and policy effective date with no BIO option.
For Choice®, Privileged Choice® and Classic Select® policies issued on/after October 1, 2007:
- New: If reducing or removing BIO: We will allow policyholders to retain their increased DBA. The new premium is calculated using original issue age, policy effective date and a new starting DBA that would have been required with the reduced (or no) BIO percentage to reach the policyholder’s current increased DBA.
The increased DBA and total lifetime benefit will increase at the reduced BIO percentage going forward.
A hypothetical example is provided on the attached flyer: New procedures to help policyholders.
For Privileged Choice Flex®, Flex 2, Flex 3 and Flex 3 Enhanced:
- No Change: If reducing or removing BIO: According to the approved policy form in most states, we will recalculate the current DBA and premium, from issue age and policy effective date, using the new (or no) BIO percentage. State exceptions apply. In the future, we may re-evaluate our procedures for these products.
Click below for additional information, including Questions & Answers:
New Policy for Reducing & Removing the Benefit Increase Option (BIO)
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