Contingent nonforfeiture is a consumer-protection feature in many long-term care insurance policies that provides a safety net if premiums rise beyond specified thresholds. If cumulative rate increases exceed a trigger percentage, policyowners may exercise contingent nonforfeiture to stop paying premiums and retain a reduced paid-up benefit based on premiums already paid. This prevents total loss of coverage when rate hikes become unaffordable, while still reflecting that less than the originally illustrated benefits are now backed by funding. Exact triggers and reduced benefit formulas are defined in policy language and state-approved filings.

Advisors discuss contingent nonforfeiture when clients receive LTC rate increase notices and are weighing options like accepting the increase, reducing benefits, or exercising nonforfeiture rights. Carriers provide disclosure letters and election forms outlining available choices and deadlines. Advisors model how reduced paid-up benefits compare to current and projected care costs, helping clients make informed decisions. Understanding contingent nonforfeiture enables advisors to show that even in difficult rate environments, policyowners retain a measure of protection instead of losing all benefits if they cannot afford higher premiums.