Class
What Does 'Class' Mean?
It is used for any possible rate increase as any approved increase by a state's Department of Insurance must be by "class". In other words, an insurance company may not increase a premium to just one person or a small group of persons, only a class of people.
More Information
In Long-Term Care Insurance, a "class" is a group of people with similar traits in common. Shared traits can include:
-
Same application date
-
Same policy form
-
Same sex
-
Same policy issue date
-
Same policy issue year
-
Same rate classification
-
Same state of policy issue
Policyholders are sorted into classes for premium purposes. In Long-Term Care Insurance, premiums are intended to remain level. Premiums can only increase across an entire class, not just for individual policies.
Sorting policyholders into classes can help insurance companies determine which groups' premiums will increase. However, it should be noted that premiums can only increase if determined absolutely necessary by state actuaries.
To learn more about classes and why they’re important, you can read our article on Long-Term Care Insurance underwriting.