How each carrier handles the removal of inflation protection at a later date:


Genworth:


For policies sold prior to 10/1/2007:

When BIO is dropped, we will continue to freeze the policyholders’ DBA at the current (inflated) level and change the policy record to indicate they no longer have a BIO. The new premium that results from this change is calculated based on the original DBA and new BIO option.

For policies sold after 10/1/2007:
Should they choose to remove the inflation, the benefit will revert to it's original amount. They do not keep the accrued benefits.
If you reduce the inflation protection rider, the maximum benefit (pool of money) will be recalculated from the original issue date assuming you had purchased the reduced inflation rider from the beginning. That would be your new pool of benefits and the reduced inflation amount would be given each policy anniversary thereafter.

MedAmerica:


Should they choose to remove the inflation, the benefit will revert to it's original amount. They do not keep the accrued benefits.

LifeSecure:


If a policyholder drops inflation coverage past 90 days after issue, the following happens.

  1. The inflated benefits are kept.
  2. The new premium is equal to buying GPO coverage at the inflated benefit level using the original rating age. Therefore, the new premium is higher than just removing the inflation coverage premium.

Transamerica:


If the insured requests cancellation of an inflation rider, our Customer Service Department offers the Insured some options regarding the increased benefits due to the effect of the inflation rider. The Insured may:
1) Keep benefits at the increased levels. The Insured will be advised of the premium required to do this. The increased amounts will be added to the policy (at issue age premiums) and the inflation rider will be removed. The policy will be endorsed to show the current benefits and to remove the rider.
2) Keep some of the benefits accrued. The Policy will be endorsed as described in 1) and premiums will be adjusted to reflect the benefits kept (issue age premiums will be used to determine premium).
3) Keep none of the benefits accrued. Benefits will be adjusted to issue level benefits and the policy will be endorsed to remove the inflation rider. The premium will be adjusted by the amount of the inflation rider.

Under 1) and 2), benefits added to the policy under the inflation rider assume lifetime premium payment, so this method of adding what has accrued (or some part of it) at issue age premiums, “reconciles” the premium required for the benefits added.
If you reduce the inflation protection rider, you will retain all benefits you accumulated to date, and receive the reduced inflation amount each policy anniversary thereafter.

Mutual of Omaha:


An inflation protection option may be removed after issue with no refund of premium. The maximum monthly benefit and remaining maximum lifetime benefit will remain at the level to which they had been increased by this benefit as of the date the benefit is removed. The premium will be changed to the appropriate premium amount for the increased benefit amount provided, based on the age at issue.

John Hancock:


If the insured decides to cancel their inflation option, they keep the accrued benefits. It stops inflating at that point. Just like a re-rated insured that chooses a landing spot option of reducing from 5% compound to 3.2% compound is also going to keep the accrued benefits.
If you reduce the inflation protection rider, you will retain all benefits you accumulated to date, and receive the reduced inflation amount each policy anniversary thereafter.

CNA:


Should they choose to remove the inflation, the benefit will revert to it's original amount. They do not keep the accrued benefits.