In-force Sun LTCI premiums are increasing beginning August 1, 2021
We’re increasing premiums on in-force Clarica LTCI, Sun LTCI series 2005 and Sun LTCI 2013 policies. Here are some commonly asked questions about the re-price.
We’re increasing premiums on in-force Clarica LTCI, Sun LTCI series 2005 and Sun LTCI 2013 policies. Here are some commonly asked questions about the re-price.
Why are we increasing premiums now?
We regularly review our adjustable premium products, including LTCI products. We follow a rigorous actuarial pricing review process and will only increase prices when necessary. Here’s a high-level description of what’s involved in that process:
The two biggest factors affecting premium increases from this pricing review are:
To help ensure our adjustable policy review process is fair to our policyholders, we follow specific laws set out in the federal Insurance Companies Act and guidelines issued by the Office of the Superintendent of Financial Institutions. This is something we take seriously and carefully review. We know it can have a big impact on Clients and how you help them assess their insurance needs.
We guarantee the LTCI premium for the first 5 policy years. After this period, we may adjust the premium on a policy anniversary. There is no set schedule for future increases. If we change the premium, we will tell the policy owner in advance. We guarantee the new premium for at least another five policy years (see example below).
Future reviews of LTCI in-force policies may result in further increases or potentially decreases. Any future adjustment depends on our experience as listed in the illustration: claims experience, interest rates, lapses, investment performance, taxes and expenses.
The decision to change rates of adjustable policies involves a thorough review of these variables and our options to manage them. Our process includes balancing the interests of the policy holder and the shareholder.
The policy does not place a limit on the potential rate increases. But, we recognize the impact that increasing premiums has on our policyholders. While we may have capped premiums in the past, this isn’t a guarantee that we will this in the future.
Example of Premium Guarantee | |
---|---|
Year | Premium |
2013 | Policy purchased. |
2018 | After the 2018 (5 year) policy anniversary: option to increase premium, but we don’t apply an increase at this time. |
2021 | Premium increase occurs: rates locked in for the next 5 years. |
Future Years | Cycle can repeat. |
Premiums on an LTCI policy are guaranteed for 5 years. If changed, they’re guaranteed for at least another 5 policy years.
This means that policies being adjusted from 2021 to 2026 will have their new premiums guaranteed for the next five years. We remind Clients of this on annual LTCI policyholder statements. The premium guarantee date is five years from when the policy is issued and/or from when we last changed the premiums.
No, we are not increasing premiums because of the Covid-19 Pandemic.
The two biggest factors affecting this premium increase are:
What determines the size of the premium increase?
LTCI premiums are adjustable. When deciding if we need to adjust premiums, we look at changes in various factors, including claims, interest rates, other investment returns, lapses, taxes and other expenses.
The two biggest factors affecting this premium increase are:
The Clients' premium increases can vary based on the following factors:
Average premium increases
Clarica LTCI (all series)
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | N/A | N/A | N/A | N/A |
31-50 | 40% | 40% | 40% | 40% |
51-60 | 34% | 34% | 34% | 34% |
61-65 | 30% | 30% | 30% | 26% |
66+ | 25% | 25% | 25% | 25% |
Sun LTCI 2005
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | 40% | 40% | 40% | 40% |
31-50 | 40% | 40% | 40% | 33% |
51-60 | 34% | 34% | 34% | 27% |
61-65 | 30% | 30% | 30% | 20% |
66+ | 25% | 25% | 25% | 13% |
Sun LTCI 2013
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | 12% | 14% | 10% | 12% |
31-50 | 21% | 21% | 15% | 16% |
51-60 | 22% | 23% | 18% | 17% |
61-65 | 18% | 16% | 14% | 12% |
66+ | 10% | 6% | 4% | 4% |
There are plan change options available for Clients who cannot, or don’t want to accept their increase. These are outlined in the plan change section of the landing page.
Here's how we're communicating the new premium amounts to you:
Average premium increases
Clarica LTCI (all series)
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | N/A | N/A | N/A | N/A |
31-50 | 40% | 40% | 40% | 40% |
51-60 | 34% | 34% | 34% | 34% |
61-65 | 30% | 30% | 30% | 26% |
66+ | 25% | 25% | 25% | 25% |
Sun LTCI 2005
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | 40% | 40% | 40% | 40% |
31-50 | 40% | 40% | 40% | 33% |
51-60 | 34% | 34% | 34% | 27% |
61-65 | 30% | 30% | 30% | 20% |
66+ | 25% | 25% | 25% | 13% |
Sun LTCI 2013
Issue ages | Male | Female | ||
---|---|---|---|---|
Limited Pay | Life Pay | Limited Pay | Life Pay | |
21-30 | 12% | 14% | 10% | 12% |
31-50 | 21% | 21% | 15% | 16% |
51-60 | 22% | 23% | 18% | 17% |
61-65 | 18% | 16% | 14% | 12% |
66+ | 10% | 6% | 4% | 4% |
Note: Some policies will be identified as manual on your listing. There are two things that can cause this:
Every month you’ll receive a list of Clients whose premiums will increase. The new premium amount is included in this list, except for policies where we need to manually calculate the premium.
Policies are identified as Manual on your listing for two reasons:
You’ll need to rely on your copy of the Client letter for increase details in manual situations. Each Client letter is sent at least 10 weeks before the premium changes. You will receive a copy in your activity centre at the same time.
Many policies will become paid-up in the next 5 years. When the policy reaches the end of the premium payment period, it becomes paid-up and premium payments end. We set out the premium guarantee date in the letter. Policies that are paid-up in the next five years will have a premium guarantee date equal to the policy's paid-up date.
We've included the policy start date and the premium payment period at the beginning of the letter to help Clients recognize how many years of payment remain.
This sentence appears in the Client's letter regardless of whether the policy is paid-up or can be adjusted in the future: "After this five-year guarantee period, if we need to adjust your premium, we'll let you know well before the effective date." You can assure Clients that there is no need to adjust premiums once a policy has reached the end of the premium paying period.
Yes. The form(s) for reinstatement is (are) the “Application for reinstatement Clarica or Sun Long Term Care Insurance” (226) if the policy has been lapsed for 62-90 days. If the policy has been lapsed between 90 and 2 years, the 226 and “Medical information and functional ability questionnaire for long term care insurance” (223) are required.
No. For Sun LTCI the Client must meet the minimum $150 weekly benefit amount and/or the minimum $30 premium per month ($333 per year).
We’re changing premiums on in-force Sun RHA policies. Here are some commonly asked questions about the re-price.
We regularly review our adjustable premium products, including LTCI products. We follow a rigorous actuarial pricing review process and will only change prices when necessary. Here’s a high-level description of what’s involved in that process:
The biggest factors affecting premium changes for the Sun Retirement Health Assist pricing review are:
Factors leading to increased premiums:
Factors having a positive impact on rates:
To help ensure our adjustable policy review process is fair to our policyholders, we follow specific laws set out in the federal Insurance Companies Act and guidelines issued by the Office of the Superintendent of Financial Institutions. This is something we take seriously and carefully review. We know it can have a big impact on Clients and how you help them assess their insurance needs.
We guarantee the LTCI premium for the first 5 policy years. After this period, we may adjust the premium on a policy anniversary. There is no set schedule for future increases. If we change the premium, we will tell the policy owner in advance. We guarantee the new premium for at least another five policy years (see example below).
Future reviews of LTCI in-force policies may result in further increases or potentially decreases. Any future adjustment depends on our experience as listed in the illustration: claims experience, interest rates, lapses, investment performance, taxes, and expenses.
The decision to change rates of adjustable policies involves a thorough review of these variables and our options to manage them. Our process includes balancing the interests of the policy holder and the shareholder.
Example of Premium Guarantee | |
---|---|
Year | Premium |
2013 | Policy purchased. |
2018 | After the 2018 (5 year) policy anniversary: option to increase premium, but we don’t apply an increase at this time. |
2021 | Premium increase occurs: rates locked in for the next 5 years. |
Future Years | Cycle can repeat. |
No, we are not changing premiums because of the Covid-19 Pandemic.
The biggest factors affecting this premium change are:
Factors leading to increased premiums:
Factors having a positive impact on rates:
LTCI premiums are adjustable. When deciding if we need to adjust premiums, we look at changes in various factors, including claims, interest rates, other investment returns, lapses, taxes and other expenses.
The biggest factors affecting this premium change are:
Factors leading to increased premiums:
Factors having a positive impact on rates:
The Clients' premium changes can vary based on the following factors:
Sun RHA – Premium changes
Issue ages | Male | Female |
---|---|---|
45 | 7.2%+ | 1.0%+ |
46-50 | 7.7%+ | 4.1%+ |
51-55 | 5.5%+ | 1.9%+ |
56-60 | 5.0%+ | 1.1%+ |
61-65 | 5.2%+ | -0.2% |
66+ | -2.3% | -8.2% |
Clarica and Sun LTCI (Series 2005) have higher premium increases for a few reasons.
The pricing actions taken in 2021 for Clarica and Sun LTCI are based on our increasing experience with these products and the above-mentioned factors.
We first priced Sun RHA in 2013 and had more information about the Long-term care insurance experience by then. The Sun RHA product design is also very different.
Sun RHA is designed so that Sun Life and the Client share the risk from the need for care later in life. That’s why Sun RHA has a coverage effective date:
Based on this product design we have had fewer claims with Sun RHA.
Sun LTCI has short waiting periods and no coverage effective date. It is designed so that the Client transfers most of the risk from the need for care later in life to Sun Life.
Clients who do claim for Sun LTCI will receive benefits for longer periods because they can claim earlier and are living longer.
The premium increases for males (up to age 65) are higher due to our claims experience. Since pricing Sun RHA in 2013, we now know that men are claiming longer than we assumed when we launched the product. This means that both men and women are getting good value from their Sun RHA coverage.
There are plan change options available for Clients who cannot, or don’t want to accept their change.
To request a plan change for Sun RHA policies use Change form - Long term care insurance (form E220).
Here's how we're communicating the new premium amounts to you:
Sun RHA
Issue ages | Male | Female |
---|---|---|
45 | 7.2%+ | 1.0%+ |
46-50 | 7.7%+ | 4.1%+ |
51-55 | 5.5%+ | 1.9%+ |
56-60 | 5.0%+ | 1.1%+ |
61-65 | 5.2%+ | -0.2% |
66+ | -2.3% | -8.2% |
We remain committed to the long-term care market through Sun Retirement Health Assist (RHA). Sun RHA will be the product available to support the long-term care conversion option available with Sun CII.
Clients who have the LTCCO on their Sun CII plans will continue to have the option to exercise the benefit between ages 60 – 65. They will be able to convert to Sun Retirement Health Assist (RHA). The conversion calculation will be the same, and the process does not change.
The last day to submit an application is December 31, 2022 and we must receive it by 11:59 PM EST.
Clients who purchase Sun RHA by December 31, 2022 will receive this premium increase in five years, after their premium rate guarantee period ends. Their illustration will not show the actual increase they will experience at that time.
Effective January 1, 2023, we’re making changes to Sun Life Retirement Health Assist rates.
To ensure a smooth transition, please take a moment to review the following rules:
Processing your application
Application Status | What Rates Will Apply? |
---|---|
Signed before January 1, 2023 | We’ll process applications using rates in effect before January 1, 2023 |
Signed on or after January 1, 2023 | We’ll process applications using the rates in effect on January 1, 2023 |
Signed on or after January 1, 2023, with a backdate request for a date before January 1, 2023 | We’ll process applications using the rates in effect on January 1, 2023 |
Signed before January 1, 2023, and within the 10-day free look |
We would have issued the policy using rates in effect before January 1, 2023 Submit an email request to the New Business area by January 31, 2023, with your application number. |
Signed before Jan 1, 2023, and past the 10-day free look period |
We would have issued the policy using rates in effect before January 1, 2023 Submit an email request to the New Business area by January 31, 2023, with your application number. |
For more information, please contact your Regional Sales Director or Advisor Experience Team.
Commission rates on Inforce LTCI are not changing.
Any change in the total premium on the policy will result in an change in commission paid and adjustment to the advisor's account for growth commissions.
Some Clients can save by purchasing coverage before January 1, 2023 as they’ll only receive this reprice once their five-year guarantee period ends.
There are various factors to consider about converting from CII to LTCI. For more information please review the Long term care conversion option page.
Of note, for CII policies with a Return of premium on cancellation or expiry (ROPC/E) benefit. If the Client's CII policy includes ROPC/E - age 65, the Client may want to receive the return of premium before converting. This means they will need to wait until age 65 before conversion.
Three scenarios for the Client to consider with ROPC/E - age 65.
Important: This also applies if a policy includes the ROPC/E - 15 years benefit and the ROP amount becomes payable between ages 60-65.
Want to share this information on social media? Select the appropriate link below.
© Sun Life Assurance Company of Canada. All rights reserved.