New York Life Promotes New Life Policy's LTC Benefits

Filing Details

Insurance regulators in the District of Columbia have included New York Life filings for the new product in their product filing database.

The company has filed filings in the Individual Life — Flexible Premium Adjustable Life category for the underlying life policy, and in the Individual Long Term Care — Nursing Home and Home Health Care category for the long-term care rider.

The filings show that, in the District of Columbia, the current guaranteed minimum crediting rate for the policy is 2%.

The company is starting by offering a purchaser a choice between a 24-moth long-term care benefit duration period or a 36-month period.

A purchaser can also buy an optional Extension of Benefits for Long-Term Care rider. The current benefit period extension options are 24 months and 48 months.

An insured can qualify for the long-term care rider benefits if the insured suffers from severe cognitive impairment, or is unable to perform two activities of daily living without substantial assistance from someone else.

The insured can use the rider benefits to:

• Pay for formal care in a nursing facility, assisted living facility or hospice in the United States.

• Pay for home health care or adult daycare services in the United States.

• Pay for some long-term care services outside the United States. (The cap on benefits for non-U.S. long-term care services is three times the monthly rider benefit.)

• Pay a family caregiver or other informal caregiver at a rate equal to half of the ordinary rider benefit rate.

• Provide up to 30 days of respite care per year for an informal caregiver.

An appendix explains the morbidity assumptions used to create the long-term care rider.

The sample policy would have 39 cents of first-year expenses per $1,000 of face amount, and $223.29 in renewal-year expenses per policy.

Commissions would be 4.5% for a single-premium policy, 5% for a 5-pay policy and 5.5% for a 10-pay policy.

Underwriting expense would be about $300 for an applicant ages 30 to 65 who was a standard risk, and about $600 for an applicant ages 30 to 75 who was a substandard risk.

The actuaries assume 2% of the purchasers would let a policy lapse in the first year, and that the maximum lapse rate in a year would be 4.3%, in the third policy year.

In an analysis of distribution assumptions, the actuaries suggest that 66% of the insureds would be women, and that 7.8% would be in the substandard risk category.

— Read AARP Picks LTC Products Provider on ThinkAdvisor.