CID: Long-Term Care Rate Filing - Lincoln National Insurance Company (Individual)

Long-Term Care Rate Filing - Lincoln National Insurance Company (Individual)

Rate request: 30 percent

Decision: Approved on February 27, 2018

On January 25, 2018, Lincoln National Insurance Company requested a 30 percent increase on a small block of business of individual long-term policies which were sold from 1991-1996 and cover nursing home care.

These policies are no longer being marketed. There are 54 policies in force in Connecticut.

The company said in its filing that the increase is needed because the increased demand for benefits and the higher cost of those benefits exceed original pricing expectations.

Unlike medical health insurance with premiums set to cover expenses incurred only during the upcoming policy year, long term care premiums are set to cover expenses that are not expected to occur until a distant date, sometimes 20 years in the future.

After an actuarial review, the Department determined that the company is spending to pay benefits exceeds what it anticipated when the product was originally priced. Lincoln National is spending approximately 80 cents of every $1 of premium it takes in to pay for benefits and without a rate increase will spend more than $1 per every premium dollar over the lifetime of the policy. That far exceeds the 60 percent statutory minimum loss ratio and there is evidence that experience on this product will continue to deteriorate. As a result, the Department approved the rate increase request on February 27, 2018.

The company said policyholders will be given the option to offset the increase and lower their premium by reducing their current benefits. Any increase of 20 percent or more must be phased in over three years to comply with state law.


Find the filing documents here at Long-Term Care Insurance Rate Filing

Content Last Modified on 2/27/2018 4:02:24 PM