§ 90g.3. Benefit design.
(a) Benefit paid if elected by owner.
(1) The form discloses that a benefit will be paid if elected by the owner when the insured receives care from a designated health care facility. The form designates one or more types of health care facilities. The following are types of health care facilities: skilled nursing facility, extended care facility, intermediate care facility, convalescent care facility, personal care facility, home care facility or hospice facility. This is not an all inclusive list of types of health care facilities which may be designated.
(2) The form does or does not provide that the cause for the need of care from the health care facility is sickness or injury.
(3) The cause for the need of care from the health care facility is not restricted to one or more specific medical condition. A medical condition, except as excluded in accordance with § 90g.4 (relating to exclusions and restrictions), is acceptable.
(4) The form does not provide that the cause may not be sickness.
(5) The form does not provide that the cause may not be injury.
(6) The form does or does not provide that the care from health care facilities is medically necessary. If the form provides that the care from health care facilities is medically necessary, the form contains a definition of ‘‘medically necessary.’’
(b) Form discloses benefit paid. The form discloses the benefit paid.
(1) The amount of the benefit paid is meaningful. If the benefit is designed as an accelerated benefit, the benefit, including the aggregate of all periodic payments, is meaningful if it is equivalent to at least 2% of the total death benefit affected by the benefit payment.
(2) The form provides an explanation of how the benefit payment is determined.
(3) The benefit is paid periodically or in a lump sum.
(4) The maximum benefit period for each occurrence of health care facility usage is at least 1 year or for a shorter period if the total death benefit affected by the benefit payment is inadequate to support payment of the benefit for a full year.
(5) Any maximum benefit period for home care benefits is or is not identical to that applied to other health care facility benefits.
(6) The form does or does not provide for a maximum monthly benefit amount.
(7) The form discloses the maximum benefit amount that will be paid over the lifetime of the coverage. This amount does not exceed 100% of the total death benefit affected by the benefit payment.
(8) A maximum benefit amount for home care benefits is not less than 50% of the benefit that applies to other health care facility benefits.
(9) The form does not provide for age or duration requirements as to when the insured is first eligible for the benefit.
(c) Conditions for payment. The form discloses the conditions for payment of the health care facility benefit.
(1) The insured receives services from a health care facility.
(2) The services are provided during the coverage period.
(3) The services are provided while the rider or the policy, in the case of a built-in benefit, are in force. The form does or does not provide for a continuation of benefit payments during the confinement period if the insured is receiving a benefit at the time the rider or policy terminates.
(4) The form does or does not require that services be provided while the policy is in full force; for example, not under a nonforfeiture option.
(5) If the payment of the benefit requires that the insured enter the health care facility within a period of time from discharge from an institutional confinement, the period of time from discharge is at least 30 days. The original institutional confinement is not required to be greater than 3 days.
(6) The insured is or is not required to receive services for a period of time prior to payment of a benefit. This period of time is referred to as an elimination or waiting period and does not exceed 90 days, or 180 days if the benefit is designed as a settlement of the life insurance proceeds based on a reduced life expectancy of the insured and there is no scheduled charge for the benefit other than an administrative expense charge made at the time the settlement is elected.
(7) A new elimination or waiting period is or is not applied each time an insured begins receiving services for a new or nonrelated cause, or for the same cause if services by a health care facility have not been provided to the insured for a period of at least 6 months.
(8) A new elimination or waiting period is not applied each time an insured begins receiving services for the same cause if the services are provided less than 6 months from the last time services were provided.
(9) If the form requires that the insured receive services for a period of time prior to payment of a benefit, the form does not require that the period of time be continuous or without interruption or that the period of time immediately precede the period for which a benefit will be paid unless ‘‘continuous,’’ ‘‘without interruption’’ or ‘‘immediately preceding’’ are defined in a manner consistent with paragraphs (7) and (8).
(10) If the form contains a home health care benefit and requires that the insured be confined in a health care facility to establish eligibility for the home health care benefit, the period of confinement is not required to be greater than 30 days.
(11) The owner requests payment of the benefit.
(12) The form does or does not provide that it can not be assigned. If the form provides that it may be assigned, the form does or does not require written consent of any assignee prior to the election of the benefit.
(13) The form does or does not require the written consent of the beneficiary prior to the election of the benefit.
(d) Death benefit reduced.
(1) The form contains a clear statement that the death benefit and any accumulation values and cash values will be reduced if a health care facilities benefit is paid. The statement appears immediately following the caption of the form in prominent type on the first page of the rider. If the benefit is built into the policy and the brief description refers to the benefit, the statement appears in close proximity to the brief description of the policy in prominent type on the first page of the policy. If the benefit is not referred to in the brief description, the statement appears in a prominent position in prominent type on the first page of the policy. Prominent type means, for example, all capital letters, contrasting color, underlined or otherwise differentiated from the other type in the form.
(2) This statement is unnecessary if the benefit is designed as a settlement of the life insurance proceeds based on a reduced life expectancy of the insured and is equal to 100% of the policy death benefit and the policy terminates upon payment of the settlement amount. The benefit can be paid out in monthly installments.
(e) Effects of payment of benefit.
(1) The form describes the effects of the payment of the benefit on the death benefit and any accumulation value, cash value, loan balance and premium payment following payment of a benefit or at settlement of the life insurance proceeds based on a reduced life expectancy of the insured.
(2) If the cash value or accumulation value is reduced by the proportional reduction in the death benefit, the fixed premiums for the policy, affected death benefit riders and health care facilities benefit are reduced by the same proportional amount.
(3) If the cash value or accumulation value is reduced by 100% of the benefit payment amount, as a lien, an adjustment in the premium of the policy, affected death benefit riders and health care facilities benefit may or may not be made.
(4) If the premium for the health care facilities benefit is flexible and the form is attached to or included in a flexible premium policy or with flexible premium affected death benefit riders, an adjustment to the premium payment of the policy, affected death benefit riders and health care facilities benefit may or may not be made. If an adjustment is made, the reasons for the premium adjustment method are explained in writing.
(5) If the benefit payment is reduced by an amount of the loan balance, the loan balance is reduced by the same amount.
(f) Single premium policy. If the form is attached to or included in a single premium policy, the benefit payment is increased by the portion of the single premium unearned as of the date of qualification for the benefit corresponding to the amount of the benefit payment.
(g) Renewable coverage. If the form provides renewable coverage, the renewability is guaranteed.
(h) Cancellation. The form is not subject to cancellation by the insurer during the coverage period, except as provided in the grace period and nonforfeiture provisions.
(i) Health care facility licensure. If the form provides that the health care facility must be licensed by the jurisdiction in which it is located, clarification is provided in the form that licensing is only required if the jurisdiction actually requires licensing.
(j) Pooling of values.
(1) The form does or does not provide for the pooling of the values of all policies issued on the insured’s life by the insurer or by the insurer and affiliated insurers. Pooling is for the purpose of determining the initial eligibility for the benefit or the amount and duration of the benefit. If a form provides for pooling, the insurer certifies that a copy of the form will be included in each affected policy. As an alternative for policies issued prior to the issuance of the form, the insurer certifies that a certificate listing all the policies eligible for the benefit will be provided to the owner. The form discloses the manner in which the pooling affects any conditions, restrictions or benefits of the form.
(2) The form does not provide for the pooling of the values of all policies issued on the insured by the insurer and nonaffiliated insurers.
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