After a thorough review of our long-term care policies, we would like to update you on important changes regarding the LTC13 product line, specifically related to requesting a rate increase on the LTC13 “pre-rate refresh” policies. LTC13 pre-rate refresh policies refers to the subset of in-force LTC13 policies issued prior to the rate refresh performed on this product that began to take effect in 2020.

Essentially, this rate increase is being requested to ensure the premiums policyholders are paying reflect the current and projected claims experience, continues to meet the needs of our policyholders, and ensure the product remains financially sustainable for the company.

What You Need to Know

This involves adjusting existing premium rates to reflect current claims experience and anticipated future costs. The adjusted premium rates for the LTC13 pre-rate refresh policies will result in a rate level that is consistent with the currently marketed LTC13 product.
This increase is needed because premiums are no longer adequate to cover the rising claim costs due to changes in policyholder behavior including higher-than-expected claims incidence and longer claim durations. In other words, more policyholders are recognizing the benefit of their long term care insurance policies, using benefits more often and for a longer period of time than anticipated.

Why the Rate Increase is Necessary

Higher Claims Incidence: The nationwide average increase for LTC13 pre-rate refresh policies is 32.8%, with a minimum of 1% and a maximum of 50.3%; however, increases requested on a state-by-state basis may vary.
Cap on Increases: We will cap rate increases at 38% for any customer within a year and certain states may limit increases further. In some cases, these limitations may cause customers to experience a multi-year increase.
State Approval: The rate increase is subject to approval by individual states, which may result in different increases across regions as the approval process progresses.

Our goal is to be transparent with policyholders about future rate increases and provide options for adjusting coverage or making other changes to ensure the product continues to meet their needs. Below, you’ll find key details to help you effectively communicate this information to your clients.

Key Points for Communication

Long-Term Care insurance is Important: We believe that long-term care insurance is essential for customers to protect themselves against future care needs. This remains a priority for us.
Ongoing Evaluation and Adjustment: We constantly evaluate experience and make timely adjustments to minimize future rate changes. Taking proactive action now leads to a smaller rate increase than would be required if the adjustment were delayed.
Regulatory Requirements: Most state regulations allow rate increases only after triggering moderately adverse experience. The LTC13 pre-rate refresh block has triggered this moderately adverse experience.
Requested Adjustments: We are requesting that the LTC13 pre-rate refresh premium rates be aligned with current new business rates, subject to state approval.
Future Communication with Policyholders: We will notify policyholders in advance about future rate changes, allowing them time to adjust their coverage as and if needed. Customer Service will be available to help producers and policyholders with options.
Benefit Decrease Options: Benefit decrease options will be based on the policyholders existing contract. It is always advisable for policyholders to discuss their options with a producer or customer service representative to determine the best path forward.

Mutual of Omaha remains committed to our policyholders, the long-term care insurance marketplace and continuing to offer competitive products with features and benefits to fit client’s needs.

We appreciate your support and partnership in communicating these important updates. If you have any questions or need additional information, please feel free to reach out to your sales director.

Thank you for your continued commitment to providing excellent service to our mutual clients.

Important Update: LTC13 Pre-Rate Refresh Increase Information

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