02-031 C.M.R. ch. 425, 031-425 app B

Current through 2022-14, April 6, 2022

Applicant Suitability 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.

By state law, the insurance company must fill out part of the information on this worksheet and ask you to fill out the rest to help you and the company decide if you should buy this policy.

Premium Information

Policy Form Number(s) __________________________

The premium for the coverage you are considering will be [$_________ per month, or $_______ per year,] [a one-time single premium of $____________.]

Type of Policy (noncancelable/guaranteed renewable): __________________________

The Company's Right to Increase Premiums:

[Insurer shall use appropriate bracketed statement, but shall not show rate guarantees on this form]:

[The company can never raise your rates on this policy.][The company has a right to increase premiums on this policy form in the future, provided that it raises rates for all policies in the same class in this state.]

Rate Increase History

[A company may use the first bracketed sentence only if it has never increased rates under any prior policy form in this state or any other state.]

The company has sold long-term care insurance since [year] and has sold this policy form since [year].

[The company has never raised its rates for any long-term care policy it has sold in this state or in any other state.] [The company has not raised its premium rates for this policy form or similar policy forms in this state or in any other state in the last 10 years.] [The company has raised its premium rates on this policy form or similar policy forms in the last 10 years. The following summary includes all such rate increases in the last 10 years: []. [Instructions to issuer: The issuer shall list each premium increase it has instituted on this policy form or any similar policy form issued in this state or any other state during the 10 years immediately preceding the date of first solicitation of the applicant. The summary shall list the policy form identification number, each calendar year the form was available for sale in any state, and the calendar year and the amount (percentage) of each increase. The issuer shall provide minimum and maximum percentages if the rate increase is variable by rating characteristics. The issuer may provide, in a clear and fair manner, additional explanatory information which will assist the applicant in understanding the rate increase history concerning the described form(s).]

Questions Related to Your Income

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 were raised, for example, by 20%?]

[The issuer shall use the bracketed sentence unless the policy is fully paid up or is a noncancelable policy.]

What is your annual income? (check one)

[]Under $10,000 []$[10-20,000] []$[20-30,000] []$[30-50,000] []Over$50,000

[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.

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 [insert year] was [insert $ amount],

but this figure varies across the country. In 10 years the national average annual

cost will be approximately [insert $ amount] if costs increase 5% each year.

What elimination period are you considering? Number of days:

Approximate $ cost is for that period of 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, approximately how much are all 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 ten 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.


[] I choose not to complete this information.

(check one)

[] I acknowledge that the insurer or its producer named below, or both of them, reviewed this form with me, including each of the following subjects: the premium amount; the company's premium rate increase history; and the potential for premium increases in the future. [For direct mail solicitations, use the following: I acknowledge that I have reviewed this form, including the information regarding the premium; the company's premium rate increase history; and the potential for premium increases in the future.] I understand these disclosures, specifically including that the premiums for this policy may increase in the future. (This box must be checked, and the company will not be able to act on your application until it is checked.)


(Applicant) (Date)

[ [] I explained to the applicant the importance of completing this information.


(Producer) (Date)

Producer's Printed Name:________________________________________ ]

In order for us to process your application, please return this signed statement to [name of company], along with your application.

[My producer or other representative has advised me that this policy does not seem to be suitable for me. However, I still want the company to consider my application.

Signed:____________________________________ ____________________________ ]



The company may contact you to verify your answers.


02-031 C.M.R. ch. 425, 031-425 app B

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