News and Announcements

07/16/2016

The Benefits of Long Term Care Insurance Are Invaluable
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07/16/2016

Responsible Claims Handling Is a Hallmark of the FLTCIP
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04/25/2016

Ensure Mom Has the Care She Needs
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What is a Lapse and Why Are Lapse Rates Important?

What is a Lapse and Why Are Lapse Rates Important?

A lapse is the cancellation of coverage due to the non-payment of premiums. Lapse rates can be an important component of the pricing of long term care insurance plans.

Consumer advocates and regulators fear that some insurance companies will sell policies to people who are probably not good candidates for purchasing the insurance and thus count on them to lapse their coverage.

By doing so, an insurance company has received premiums for a period of time but no longer faces the risk of paying out benefits.

Use of a high lapse rate assumption in setting premiums can result in a lower-priced product and the use of a low lapse rate assumption in setting premiums can result in a higher-priced product.

Note: The Federal Long Term Care Insurance Program's lapse history is provided in the important information section.

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Apply Today!

Federal family members can apply for coverage anytime—you do not have to wait for the next open season. Premiums are based on your age and the premium rates in effect at the time we receive your application—the younger you are when you apply, the lower your premium will be.

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