Effective August 2, 2010, in the states listed below, we will implement new business rates and reduce the Preferred Health discount on Custom Care II Enhanced. The rates are being adjusted to more accurately reflect the current economic environment and the latest claims trends and will vary by age, inflation protection, and the benefit period selected. You will see a modest adjustment of about 5%, on average to CPI rates, and a greater increase of an average 32% on 5% compound inflation plans, which reflects the higher levels of risk associated with fixed-rate, guaranteed benefit increases. In addition, 5% simple plans are increasing an average 19%, and GPO plans an average 6%.

Also on this date, we will lower the Preferred discount from 15% to 10%, to more appropriately address the impact of lower mortality on Preferred risks (for partners the discount will be reduced from 40% to 35% if both approved, and from 30% to 25% for one approved).

State implementation of new rates/discount for August 2, 2010

*In KS and NC: The Outline of Coverage and Sample Policy has been updated to reflect a change to the approved policy form number. These forms will now have a 6/10 edition date.

As additional states approve the new rates and reduction in the referred discount, you will be notified via Newslink 14 days in advance of the effective date. Note: Individuals who previously purchased Custom Care II Enhanced
policies are not affected by these new rates or change to the discount.

For an overview of our recent product and pricing changes, read "The New Reality for LTC Insurance"(LTC-1053).

Illustrations
On August 2, 2010, you will be able to illustrate the new rates/discounts in these states on eHansel. For those using Hansel, you will be able to download the update (v. 12.3) from www.jhltc.com. Revised rate cards will be available to download from www.jhltc.com on August 2, 2010. State specific rates apply in: CT, CTP, INP, NY and VT.

Administrative process

Applications for Custom Care II Enhanced, in the above mentioned states must be signed on or before August 1, 2010 and received in the home office by August 16, 2010. No exceptions will be made. Applications signed/received after these dates will not be processed.