In-force LTCI repricing

In-force LTCI repricing

  • We’re repricing in-force LTCI policies – Sun and Clarica - beginning August 1, 2021.
  • This reprice will unfold over five years – until 2026. Clients will only see their premiums increase once their five-year premium guarantee period ends.
  • We’re not increasing rates for Sun Retirement Health Assist (RHA) at this time.

Delivering news of a premium increase can be uncomfortable, but Clients will look to you for guidance and support as they determine how to deal with the change. We’ve got resources to help you every step of the way as you assess the impact on your business, reach out to those affected and continue to seek out long-term-care insurance solutions for Clients

What’s happening and why

Click to expand for everything you need to understand the impact of these changes to you and Clients.

In-force LTCI premiums are increasing beginning August 1, 2021

Beginning August 1, 2021, premiums will go up once a policy’s five-year guarantee period ends. Increases can range from 4% to 40%.

To help limit the impact on policyholders while managing future claims, we’ve capped increases at 40% for issue ages 65 and under. For issue ages 66 and over, we’ve capped increases at 25%.

Why the increase?

LTCI premiums are adjustable and we regularly review our rates. We’re increasing premiums after looking at various factors, including long-term care insurance claims, interest rates, other investment returns, lapses, taxes and other expenses.

The two factors affecting this premium increase are:

  • increased claims costs due to increases in life expectancy (claims will last longer than we expected because people are living longer than ever)  
  • the ongoing low interest rate environment (interest rates have been low for many years and this affects the funds we’ve invested to pay future claims)

How we’re reaching out to Clients

We’re sending letters to Clients at least 10 weeks before their premiums will increase. We’ll continue to do this as each policy approaches the end of its five-year guarantee period.

The letters help explain why we’re increasing rates and what that means for Clients and their policies.

How we’re supporting you

You’ll receive the names of affected Clients, and their premium increases, through Activity Centre. You’ll have this about two months before we notify them. You’ll also receive copies of Clients’ letters when we send them. This cycle will continue until 2026.

Clients will look to you to understand this change and their five-year guarantee period. The advisor toolkit below has resources to help you reach out to them.

What the increases look like

Premium increases can range from 4% to 40% depending on these four factors:

  • the original product purchased
  • the premium paying period for the product  
  • the age of the insured person at the time of purchase
  • the birth sex of the insured person

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%

22%

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%

Advisor toolkit

Determining dependency

Definition

The insured person is dependent when we've determined through objective measures that there are functional limitations for either deteriorated mental ability (cognitive impairment) or activities of daily living including stand-by assistance for bathing and transferring, as described below.

Constant supervision by another person because of deteriorated mental ability

 or 

Substantial physical assistance with at least two activities of daily living 

or 

Stand-by assistance to perform bathing and transferring

Note:
We won't pay benefits when you are outside Canada or the United States for more than eight consecutive weeks.

Deteriorated mental ability (cognitive impairment)

The insured person is dependent when they need constant supervision by another person for protection from threats to their physical health and safety as the result of deterioration in or a loss of:

  • short-term or long-term memory,
  • orientation as it relates to people, place and time,
  • reasoning, or
  • judgment as it relates to safety awareness.

Deteriorated mental ability must result from an organic brain disorder such as Alzheimer's disease, irreversible dementia, or brain injury. The diagnosis must be made by a specialist licensed and practicing in Canada or the United States based on:

  • clinical examination,
  • radiological studies and
  • psychological testing.

Activities of daily living (ADL)

The insured person is dependent when they require substantial physical assistance, with or without assistive devices, to safely and completely perform two or more activities of daily living. Activities of daily living include bathing, dressing, toileting, transferring, continence and feeding.

Activities of daily living defined:

Bathing means washing with or without the aid of assistive devices: in a bathtub or shower, including getting in and out of the bathtub or shower or by sponge bath.

  • Bathing does not include the ability to reach and wash the back or feet.

Dressing means putting on, taking off, fastening, and unfastening, with or without the aid of assistive devices: clothing and medically necessary braces or artificial limbs.

  • There is no dependency if reasonable alterations to or changes in the clothing the insured person usually wears would enable them to dress without substantial physical assistance.

Toileting means getting to and from and on and off the toilet, with or without the aid of assistive devices, and performing associated personal hygiene.

  • Transferring means moving into or out of a bed, chair, or wheelchair, with or without the aid of assistive devices.

Continence means the ability to control both bladder and bowel functions or maintain a reasonable level of personal hygiene (including caring for catheter or colostomy bag) when notable to control bowel or bladder functions. Feeding means the ability to get food into the body, with or without the aid of assistive devices, through the mouth or by feeding tube. Feeding does not include cooking or preparing a meal.

Stand-by assistance for bathing and transferring

 The insured person is also dependent when they require stand-by assistance for bathing and transferring. Stand-by assistance means another person must always be within arm's reach of the insured person so they may safely and completely perform the activities of bathing and transferring. 

If the insured person requires stand-by assistance for only one of bathing or transferring, we consider them dependent when they also require substantial physical assistance to perform one of the other ADL.

Assistive devices

Assistive devices are aids that we determine could be used to improve the insured person’s functioning. These include adjustable beds, buttonhooks, canes, crutches, grab bars, handheld showerheads, bath brushes, seat lifts, transfer benches, walkers, and wheelchairs. If using an assistive device allows the insured person to perform an ADL safely and completely, the insured person is not dependent for that activity.

Making a claim

Waiting period

The waiting period is the length of time you must be continuously dependent before a claim is submitted*. It starts on the date you first require assistance for two or more activities of daily living or the date you first require continual supervision. 

*The waiting period doesn't have to be met again when we receive proof you qualify for benefits within 180 days after we stopped paying benefits. The reason for the dependency doesn't have to be the same as for the previous claim.

Palliative care (end-of-life care)

Regardless of the waiting period in your contract, you can submit a claim 30 days after you:

  • require substantial physical assistance for at least four activities of daily living.
  • have been diagnosed with a terminal disease, or illness by a qualified physician or another healthcare professional acceptable to us; and
  • are receiving palliative care that's supportive and provides comfort.

When to make a claim

The policy must be in effect on the date a claim is submitted. The insured person must be continuously dependent for longer than the waiting period, and the conditions described under the heading, how we determine dependency must be satisfied.

A claim may be submitted before the waiting period is satisfied if the insured person is receiving palliative care. This is described under the heading, Palliative care (end-of-life care).

We must receive the claim immediately following the end of the waiting period and no later than 120 days from that date. Any claim received after that time is late and we may decline it without assessing dependency.

We'll consider a late claim exception if:

  • we receive the claim no later than one year from the date the insured person became dependent, and
  • the claimant provides a written explanation describing why the claim is late and we agree the explanation is reasonable.

How to make a claim

Step 1: Notify us

To make a claim, contact the Individual Claims Services department. We will then send the appropriate claim form to be completed. You can call Individual Claims Services toll free at 1 877-272-2020 or e-mail disable@sunlife.com

The person making the claim must complete the form(s) and give us the information we need to assess the claim. 

The insured person must be in Canada or the United States at the time a claim is made. 

If they are not, they must return to be assessed by a physician licensed and practicing in Canada or the United States. 

Before we approve the claim, the insured person's date of birth must be verified. If the date of birth given on the application is incorrect, we'll adjust the amount we pay to reflect the insured person’s correct age. 

Policy premiums must continue to be paid until we notify the claimant that we've approved the claim. 

The form(s) and information must be sent to:
Individual Claims Services Sun Life Assurance Company of Canada
227 King St S, PO Box 1601, Stn Waterloo
Waterloo ON
Canada
N2J 4C5

Physicians may charge a fee to complete certain forms. The person making the claim is responsible for any fees for this information.  

Step 2: Collection of medical information

The claimant must give us the information we need to assess the claim. This includes our form which must be completed by a physician or another health care professional acceptable to us. The physician must describe the insured person's medical condition, limitations and functional abilities and provide objective medical information about their dependence. 

We will tell you if we need any other information to assess the claim. This could include medical records, clinical tests, physiotherapy reports, psychological tests and any other objective medical information that supports the claim. Any fees charged by physicians to complete forms or provide information are the claimant's responsibility. 

Physicians, specialists, or healthcare practitioners who provide information to us must be licensed and practicing in Canada or the United States. They may not be the policy owner, insured person, anyone entitled to make a claim under this policy, or any relative or business associate of these people. 

We may require the insured person to be examined by any healthcare practitioners that we appoint. These may be licensed physicians, physiotherapists, occupational therapists, psychiatrists, psychologists, or others.

We pay for these examinations.;

We may also require the insured person to authorize us to gather and use information from other insurers or government agencies.

Step 3: Making the claims decision 

Once we receive all information we require, we will assess the information and make a decision. We communicate this decision to the claimant and pay the benefit to the policy owner or the estate, if applicable. If we deny a claim, we send a letter explaining the decision to the owner. If the owner and the insured person are not the same person, we will send two decline letters:

  • one letter to the insured person, fully explaining our decision, and
  • a second letter to the owner, confirming our denial of the claim. No medical information is given to the owner for privacy reasons.

To contact the Individual Claims Services department, use: E-mail: ltcclaims@sunlife.com
Telephone: 1 877 272-2020
Fax: 519-888-2164

Exclusions and limitations

The policy ends and benefits are not payable if the insured person's dependency started before the later of:

  • the most recent date an application for this policy was signed,
  • the policy date shown under the heading Policy summary, or
  • the most recent date this policy was put back into effect if the policy has been reinstated.

We will not pay benefits if the insured person's dependency is directly or indirectly caused by or associated with the insured person operating a vehicle while their blood alcohol level is more than 80 milligrams of alcohol per 100 milliliters of blood. A vehicle includes any form of ground, air or marine transportation that can be put into motion by any means, including muscular power. We do not take into account whether or not the vehicle is in motion.

We will not pay benefits if the insured person's dependency is directly or indirectly caused by or associated with the insured person:

  • committing or attempting to commit a criminal offence;
  • attempting to take their own life, while sane or insane;
  • causing themselves bodily injury, while sane or insane
  • intentionally taking any drug other than as prescribed by a licensed medical practitioner and in accordance with the instructions given; and/or
  • intentionally taking any intoxicant, narcotic or poisonous substance - this does not include smoking cigarettes, cigarillos, cigars, chewing tobacco or occasional use of alcohol.

We will not pay benefits if the insured person's dependency is directly or indirectly caused by or associated with civil disorder or war, whether declared or not.
We also will not pay benefits when the insured person is outside Canada or the United States for more than eight consecutive weeks. If we've paid beyond the eight consecutive week limitation, we have the right to deduct the overpayment from any future benefits.

Tips for an efficient claims process

  • Make sure you understand the claim triggers and that the Client meets the definition of dependence as defined by the contract. This will help reduce ineligible claims, set better expectations for the insured person and reduce potential expenses.
  • Verify the waiting period listed in the policy. After the waiting period has been met, complete and submit the claim form
  • Make sure the form is complete, signed and dated before you submit it. . 
You will need to include:
  • the full address (including postal code) of all doctors the insured has consulted, and
  • the phone number of all doctors the insured has consulted. 
  • Verify the insured's date of birth and check it against that listed in the policy.
  • It is important that we obtain all medical reports from the physician to support the claim. If the reports are not sent to us, we cannot do a full evaluation and this will cause delays. 
Sample Client letters 

Standard Client letter

RE:   Your long-term care insurance policy
Policy LI-9876,543,2
Policy start date: October 23, 2002   
Name of insured person: Jane Doe 
Premium payment period: Lifetime  

We value your business and have some important information to share with you.

Beginning on your next policy anniversary, your premium is increasing on your long-term care insurance policy.

Long-term care insurance provides a weekly benefit when declining health leads to a need for substantial assistance from others. The premiums you pay for this coverage can vary based on factors like how old the insured person was when this policy was issued and their birth sex. Your premiums are adjustable and we regularly review these policies. When deciding if we need to change your premiums, we look at various factors, including claims, interest rates, other investment returns, lapses, taxes and other expenses.

Why are we increasing your premiums now?

The two biggest factors affecting this premium increase are:

  • increased claims costs, and
  • the ongoing low interest rate environment (interest rates have been low for many years and this affects the money we've invested to pay future claims).

What does this mean for your policy?

Your current monthly premium is $83.00. On your next policy anniversary, October 23, 2021, the premium will automatically increase to $96.98. We guarantee this new premium will stay the same until October 23, 2026. After this guarantee period, if we need to adjust your premium, we'll let you know well before the effective date.

This premium adjustment doesn't change your coverage.

  • A weekly comprehensive benefit of $385.
  • The benefit is payable for unlimited weeks.

Questions?

You may want to review your policy for detailed information about your coverage, including the premium guarantee. Your advisor, George Lucas, is available to help you review your coverage. You can reach them at 519-123-4567.  You can also reach us at 1 877 SUN-LIFE (1 877 786-5433). We're here to help.

Sincerely,

The team at Sun Life

Letter for Clients whose premiums are being waived

RE:   Your long-term care insurance policy
Policy LI-J123,456-9
Policy start date: October 8, 2006
Name of Insured person: Jane Doe
Premium payment period: Lifetime
We continue to waive your premiums

We value your business and have some important information to share with you.

Beginning on your next policy anniversary, your premium is increasing on your long-term care insurance policy.

Long-term care insurance provides a weekly benefit when declining health leads to a need for substantial assistance from others. The premiums you pay for this coverage can vary based on factors like how old the insured person was when this policy was issued and their birth sex. Your premiums are adjustable and we regularly review these policies. When deciding if we need to change your premiums, we look at various factors, including claims, interest rates, other investment returns, lapses, taxes and other expenses.

Why are we increasing your premiums now?

The two biggest factors affecting this premium increase are:

  • increased claims costs, and
  • the ongoing low interest rate environment (interest rates have been low for many years and this affects the money we've invested to pay future claims).

What does this mean for your policy?

Your current annual premium is $9249.10. On your next policy anniversary, October 8, 2021,  the premium will automatically increase to $9702.70. We continue to waive your premiums. We guarantee this new premium will stay the same until October 8, 2026. After this guarantee period, if we need to adjust your premium, we'll let you know well before the effective date.

This premium adjustment doesn't change your coverage.

  • A weekly comprehensive benefit of $550.
  • The benefit is payable for unlimited weeks.
  • A weekly facility care benefit of $150.
  • The benefit is payable for unlimited weeks.

Questions?

You may want to review your policy for detailed information about your coverage, including the premium guarantee. You can reach us at 1 877 SUN-LIFE (1 877 786-5433). We're here to help.

Sincerely,

The team at Sun Life

Letter for Clients receiving an IP offer and premium increase

RE:   Your long term care insurance policy
Policy LI-9876,543-2
Policy start date: October 23, 2002
Name of Insured person: Jane Doe
Premium payment period: Lifetime


We’re writing to you about your premiums and inflation protection benefit.

Beginning on your next policy anniversary, your premium is increasing on your long-term care insurance policy.

Long-term care insurance provides a weekly benefit when declining health leads to a need for substantial assistance from others. The premiums you pay for this coverage can vary based on factors like how old the insured person was when this policy was issued and their birth sex. Your premiums are adjustable and we regularly review these policies. When deciding if we need to change your premiums, we look at various factors, including claims, interest rates, other investment returns, lapses, taxes and other expenses.

Why are we increasing your premiums now?

The two biggest factors affecting this premium increase are:

  • increased claims costs, and
  • the ongoing low interest rate environment (interest rates have been low for many years and this affects the money we've invested to pay future claims).

What is the amount of this inflation protection offer?

You may choose to increase your weekly benefit by 13 percent without providing medical information. Currently, your policy provides a weekly benefit of $683. The benefit is payable for unlimited weeks.

How does the premium increase and accepting the inflation protection offer affect your policy?

Your current monthly premium is $128.32.

If you accept the inflation protection offer, on your next policy anniversary, October 23, 2021, the weekly benefit amount will increase to $772 and the premium will increase to $206.02.

If you don't accept the offer, your weekly benefit amount won't increase and your premium will increase to $151.37.

We guarantee we can't adjust your premiums before the premium guarantee date - October 23, 2026. If we need to adjust your premiums in the future, we'll let you know well before the effective date. If you accept future inflation protection offers, your premiums will increase.

More information about inflation protection offers

We make inflation protection offers to you every three years. The amount of each offer is based on provincial long term care statistics we track. These offers stop when:

  • you've declined two offers,
  • you've received benefit payments,
  • we're waiving your premiums,
  • your policy is paid-up and we require no further premiums, or
  • the insured person reaches the age of 85.

Accepting an inflation protection offer does not change your premium guarantee date. 

To accept the inflation protection offer, return the attached form in the envelope provided.  If we don't receive your completed form postmarked by September 14, 2021, you'll have declined this inflation protection offer.

Questions?

You may wish to review your policy for detailed information about your coverage including the premium guarantee. Your Customer Care Centre is here to help toll-free at 1 877 SUN-LIFE (1 877 786-5433).

Sincerely,

The team at Sun Life

Key dates to know about

April 27, 2021

First lists of affected policies sent to advisors and firms. Advisors will receive lists of Clients affected in August (April 27) and in September (April 29). Lists will continue monthly.

May 14, 2021

First round of Client letters mailed - sent to Clients at least 10 weeks before their rate change takes effect.

August 2021

Clients begin to see premium increases.

NEW CLIENT LETTERS AND LISTS ARE SENT EACH MONTH

2026

Reprice cycle finishes.

Support team contacts
  • In-force policies
  • Close of new business