UNUM Announces 114% LTCI Rate Increase!

10/26/2015

Policyholders can eliminate the entire increase by reducing their future inflation increases.

UNUM announced its latest in-force premium increase on two of its LTC insurance blocks of business impacting policyholders in 21 states. (MO & IL have not yet approved this increase.)

The largest increase of 114% impacts people who have a 5% "Compound" automatic inflation increase benefit.
People with 5% "Simple" inflation (or equal increases) face a somewhat smaller increase of 83%.
The increase applies to policy series called "Advantage I" or Advantage Plus"
This will be the third in-force rate increase for some older UNUM policies.
The increase does NOT take effect until the next policy anniversary date which in many cases may be well into 2016.

Policyholders will be notified individually of their specific increase and state-approved options for reducing or eliminating the increase entirely. Policyholder letters should begin to arrive in early November.

Inflation option to avoid the increase:

Like any LTC insurance policy, the premium can be reduced by reducing benefits, for example, changing from a "Lifetime" benefit period to 6-years, or from 6-years to 3 years; policyholders can also reduce the amount of coverage per month.
UNUM is offering a special option with this increase:

If you reduce your FUTURE inflation percentage from 5% to 3% (for either Compound or Simple options), then there will be NO CHANGE to your premiums related to this increase.
All benefit increases earned to date under past 5% increases will remain in effect; the inflation rate change only impacts the increase of benefits going forward.

ComfortLTC recommends most policyholders should elect the reduced, 3% inflation option.

If your health is in decline and you may file a claim soon, you may want to consider accepting the full increase.
You are not affected if:

You are on claim.
You have a policy that is past its 10-pay, paid-up period.
Your state has not yet approved this increase.

There are state differences (a lower approved increase percentage, or increases spread out over three years). The states currently impacted are:

AK, AZ, CO, IA, KS, MI, NC, NJ, NV, NY, OH, OK, OR, SC, SD, TN, TX, UT, WI, WV, WY

Call your agent; or contact us for a personalized policy review and recommendation.

4 Comments

lloyd coskey

7/26/2016 11:38:15 am

I was told my premiums would NEVER increase with UNUM. This year they went up 43%. Was that not a contract? How does UNUM break a contract?

Bill Comfort link

7/26/2016 12:06:39 pm

Lloyd, I'm sorry that you were told your premiums would never increase, that has never been true with UNUM, nor with any other "traditional" LTC insurance plan. Since the early 2000s, every application has included a premium increase disclosure and a separate statement that premiums are not guaranteed which the applicant must sign. Before that the disclosures were less obvious.

Your policy is your "contract" (or if you have UNUM group coverage you will have a "certificate of coverage" along with a benefit booklet from the sponsoring employer). And the policy will state that premiums are not guaranteed.

If your policy was issued before 1997 the premium disclosures in the policy may not be as obvious as on policies issued after that.

The policy may state on the first page, and for sure in the policy itself that the premiums are not guaranteed. You will also see the term "guaranteed renewable" which can be confusing. Guaranteed renewable means the company cannot cancel or change your coverage as long as you keep paying premiums - you have the right to renew, to continue coverage, but that does not mean the premium amount itself is guaranteed.

No one likes a rate increase, especially when unexpected, or when led to believe it would never happen. But for most people accepting the increase - or making a reasonable modification/reduction to benefits to mitigate the increase - is a wise decision and is still a good value for the ongoing coverage provided.

Please contact me directly if I can provide a more personalized review and guidance for you and your coverage.

Carswell

2/3/2017 11:35:39 am

What is premium increase situation in Maryland. 15% was authorized but will Maryland permit another 15% next year or the year after?

2/3/2017 05:02:24 pm

I don't have any in-force business in Maryland so don't have any current information ... I will try to get a detailed answer to your question from the company for you ...

I would expect that if UNUM had originally asked for a higher increase (e.g., 43%, but only got 15% approved) it's very likely the company has gone back to the state with a new request for the additional increase. Most states have granted the full amounts requested, so there is good reason to believe they are necessary increases.

The amount of a rate increase depends on the policy "series". UNUM has had several different individual policies series and a couple different group policy series, each of which could receive a different rate increase (requested and approved). Which is why you will see information about 114% or 43% or some other numbers reported at different times.

Your comment will be posted after it is approved.