Frequently asked questions (FAQ)

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.

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:

  • We look at the various actuarial assumptions we made at the time of the last repricing.
  • Then, we compare those assumptions with the actual results we’ve experienced since the time of the last repricing.
  • This comparison helps us decide if we need to make changes to those assumptions going forward.
  • This, in turn, helps us decide what changes, if any, we need to make to your premiums.

The two biggest factors affecting premium increases from this pricing review are:

  • Increased claims costs due to longer life expectancies and, therefore, longer claims.
  • An ongoing low interest rate environment, which affects the money we’ve invested to pay future claims.

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.

This is the second time you increased premiums, the last being 5 years ago. Do you expect an increase every 5 years and at this same rate?

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.

When can we increase LTCI premiums? I thought it was only at 5 year intervals.

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.

Are rates increasing because of the Covid-19 Pandemic?

No, we are not increasing premiums because of the Covid-19 Pandemic.

The two biggest 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), 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).
When can we increase LTCI premiums? I thought it was only at 5 year intervals.

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.

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:

  • increased claims costs due to increases in life expectancy (claims will last longer than we expected because people are living longer than ever), 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).

The Clients' premium increases can vary based on the following 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%

What options are available to Clients if they want to lower their premiums?

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.

When will I learn about Clients’ new premium amounts?

Here's how we're communicating the new premium amounts to you:

  1. We’ll send monthly Client lists to your activity centre. These listings will appear around month end; one month before we send Client letters, and three months before the effective date of the increase. The listing includes the policy number, the Client name and the new premium.
  2. Copies of Client letters - Clients will receive a letter with their new premium about 10 weeks before the effective date of the increase. When we mail that letter, you’ll see a copy in your activity centre.
  3. You can use this chart to estimate the Client’s premium increase.  

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%

Note: Some policies will be identified as manual on your listing. There are two things that can cause this:

  1. The policy has a history of special handling, which must be manually interpreted when setting the premium.
  2. The policy is a Clarica LTCI plan that is receiving an Inflation Protection (IP) offer along with the premium increase. You’ll need the letter to understand these details. We recommend you also request a Plan Change Quote from the Plan change team for a detailed breakdown of the history of the IP offers accepted.
On the Client listings, I sometimes see the word "manual". What does this mean?

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:

  • The policy has a history of special handling, which must be manually interpreted when setting the premium.
  • The policy is a Clarica LTCI plan that is receiving an IP offer along with the premium increase. You’ll need the letter to understand these details. We recommend you also request a Plan Change Quote from the Plan change team for a detailed breakdown of the history of the IP offers accepted.

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.

A Client's policy is supposed to be paid-up next year. Why does the increase letter suggest that the premium may be adjusted after five years?

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.

Sun LTCI is closing to new sales on June 14, 2021

We’re closing Sun LTCI to new sales on June 14th. Here are some commonly asked questions about the closing of Sun LTCI.
Are we communicating the closing of Sun LTCI to Clients who own a Sun CII policy with the long-term care conversion option?

We will not be contacting Clients about the closing of Sun LTCI.

We are committed to the long-term care insurance 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.

Sun CII contracts do not guarantee a specific LTCI product will be available for conversion.

On June 14, 2021 we’re lowering the minimum weekly benefit amount for Sun RHA from $500 to $125. This helps make this solution even more accessible to Clients with LTCI needs and offers more flexible coverage when converting from Sun CII.

What is the last day I can submit a Sun LTCI application?

The last day to submit an application is June 25, 2021 and we must receive it by 11:59 PM EST.

Clients who purchase Sun LTCI by June 25, 2021 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.

Transition rules

Effective Jun 14, 2021, we’re closing Sun LTCI.

To ensure a smooth transition, please take a moment to review the following rules: 

Processing your application for New Business

Application status 

How we will process the application? 

Signed and received by June 25, 2021 at 11:59 pm EST 

Email:  wholesale.new.business@sunlife.com  Fax: 1-866-693-0324 

We’ll process applications as applied for. 

Received after June 25, 2021 at 11:59 pm EST. 

Application will be returned to firm 

Reissue requests received after June 25, 2021 at 11:59 pm EST. 

Requests will not be accepted, please contact the New Business Wholesale team for exceptional circumstances.  

Email:  wholesale.new.business@sunlife.com   

All cases must be settled and placed by September 30, 2021. 

Exercising the Long-Term Care Conversion Option from Sun CII

The last day we will accept Sun CII conversions to Sun LTCI is Jun 25 at 11:59pm EST. After that time, Sun RHA will be available for conversions. 

For more information, please contact your Regional sales director or Advisor Experience Team. 

What if a Client has a need for long-term care insurance?

We understand your need for long-term care solutions to meet the needs of Clients, especially as more Canadians enter retirement.  

Sun RHA remains a great offering for Canadians looking for a long-term-care insurance solution. It remains available for conversions from Sun CII and rates are not increasing at this time.

Why are you closing Sun Long Term Care Insurance Sun LTCI) to new business?

After careful consideration, we’re closing Sun LTCI to new business due to a steady decline in sales over the past few years. We remain committed to the long-term care market through Sun Retirement Health Assist (RHA). We’re lowering the minimum weekly benefit for Sun RHA from $500 to $125 to help make it even more accessible to Clients.

What about my Clients with the Long-term care conversion option (LTCCO)?

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.

On June 14, we’re lowering the minimum weekly benefit amount for Sun RHA from $500 to $125. This will help make the solution even more accessible to Clients with LTCI needs and offer more flexibility with coverage as a result of conversions from Sun CII.

For more information on Retirement Health Assist or details on exercising the LTCCO please click the links below.
Can the Client still reinstate a long term care insurance policy after Sun LTCI has been closed to new business sales?

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.

Sun RHA now has a weekly benefit amount minimum of $125. Can the Client lower their Clarica or Sun LTCI weekly benefit amount to $125?

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).

In-force Sun RHA premiums are changing beginning January 01, 2023

We’re changing premiums on in-force Sun RHA policies. Here are some commonly asked questions about the re-price.

Why are we changing premiums now?

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:

  • We look at the various actuarial assumptions we made at the time of the last repricing.
  • Then, we compare those assumptions with the actual results we’ve experienced since the time of the last repricing.
  • This comparison helps us decide if we need to make changes to those assumptions going forward.
  • This, in turn, helps us decide what changes, if any, we need to make to your premiums.

The biggest factors affecting premium changes for the Sun Retirement Health Assist pricing review are:

Factors leading to increased premiums:

  • increased claims costs - increases in life expectancy means claims will last longer than we expected because people are living longer than ever;
  • low interest rates - although rates did start to increase in 2022, they had been low for over 10 years and this affects the money we’ve invested to pay future claims.

Factors having a positive impact on rates:

  • Lapse experience has been favorable.
  • We have received fewer claims than expected.

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.

Do you expect a change every 5 years and at this same rate?

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.

2018After 2018 (5 year) policy anniversary: option to change premium, but we don’t apply any change at this time.

2023

Premium change occurs: rates locked in for the next 5 years.

Future Years 

Cycle can repeat.

Are rates changing because of the Covid-19 Pandemic?

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:

  • increased claims costs - increases in life expectancy means claims will last longer than we expected because people are living longer than ever;
  • low interest rates - although rates did start to increase in 2022, they had been low for over 10 years and this affects the money we’ve invested to pay future claims.

Factors having a positive impact on rates:

  • Lapse experience has been favorable.
  • We have received fewer claims than expected.
What determines the size of the premium changes?

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:

  • increased claims costs - increases in life expectancy means claims will last longer than we expected because people are living longer than ever;
  • low interest rates - although rates did start to increase in 2022, they had been low for over 10 years and this affects the money we’ve invested to pay future claims.

Factors having a positive impact on rates:

  • Lapse experience has been favorable.
  • We have received fewer claims than expected.

The Clients' premium changes can vary based on the following factors:

  • the age of the insured person at the time of purchase
  • the birth sex of the insured person

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%+

61-655.2%+-0.2%

66+

-2.3%

-8.2%

Why are the premium increases for Clarica and Sun LTCI (Series 2005) higher than those for Sun RHA?

Clarica and Sun LTCI (Series 2005) have higher premium increases for a few reasons.

  1. 1. We originally priced these products as early as 1999. We were in a different economic environment and LTCI was a new solution in the Canadian insurance industry.
  2. 2. In pricing the product, we made certain assumptions about our projected experience with interest rates, mortality, morbidity, and claims.

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 Life originally priced Sun LTCI 2013 and Sun RHA at the same time. Why is there a big difference in the reprice of these products?

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:

  • five consecutive policy years from the policy date, or
  • the policy anniversary immediately following the insured person's 65th birthday and longer waiting periods.

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.

Why are the premium increases for Sun RHA higher for males than for females?

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.

What options are available to Clients if they want to lower their premiums?

There are plan change options available for Clients who cannot, or don’t want to accept their change.

Plan changes available for Sun Retirement Health Assist (RHA) policies

  1. Reduce the weekly benefit amount:
    • Minimum: $125
  2. Lengthen the waiting period:
    • 730 days (2 years)
  3. Remove the optional Return of premium on death (ROPD):
    • The automatic ROPD will still be available on the policy, but if the insured person dies after the coverage effective date, there will be no ROPD value.

To request a plan change for Sun RHA policies use Change form - Long term care insurance (form E220).

When will I learn about Clients’ new premium amounts?

Here's how we're communicating the new premium amounts to you:

  1. We’ll send monthly Client lists to your activity centre. These listings will appear around month end; one month before we send Client letters, and three months before the effective date of the change. The listing includes the policy number, the Client name and the new premium.
  2. Copies of Client letters - Clients will receive a letter with their new premium about 10 weeks before the effective date of the change. When we mail that letter, you’ll see a copy in your activity centre.
  3. You can use this chart to calculate the Client’s premium change.

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%+

61-655.2%+-0.2%

66+

-2.3%

-8.2%

What about my Clients with the Long-term care conversion option (LTCCO)?

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.

What is the last day I can submit a Sun RHA application prior to the rate 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.

Transition rules

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, 2023We’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
settled, and

within the 10-day free look

We would have issued the policy using rates in effect before January 1, 2023
If it is in the Client’s best interest to receive the new rates, we’re allowing a reissue.

Submit an email request to the New Business area by January 31, 2023, with your application number.

Signed before Jan 1, 2023, and
settled in December 2022, and

past the 10-day free look period

 

We would have issued the policy using rates in effect before January 1, 2023
If it is in the Client’s best interest to receive the new rates, we’re allowing a reissue.

Submit an email request to the New Business area by January 31, 2023, with your application number.
How does this pricing change impact my compensation for these policies?

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.

My Client has the Long-Term Care Conversion Option on their Sun Critical Illness Insurance policy, should they convert to Sun RHA now?

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.

  • Convert the total CII benefit before age 65 - the policy will end and no return of premium (ROP) benefit will be payable.
  • Convert a portion of the CII benefit between age 60 and 65 - the remaining ROP benefit is prorated to align with the remaining CII coverage. The adjusted ROP benefit will be payable at age 65.
  • Convert all or a portion of the CII benefit at age 65 - the Client will be able to access the ROP benefit and convert to LTCI.