Minnesota State Legislature has introduced Senate Bill 2457, a significant piece of legislation aimed at reforming long-term care insurance policies. Introduced on April 3, 2025, the bill seeks to enhance consumer protections and clarify the terms under which long-term care insurance can be contested by insurers.

One of the key provisions of Senate Bill 2457 is the establishment of a two-year contestability period for long-term care insurance policies. Under this bill, insurers will not be able to contest a policy based on misrepresentation after it has been in force for two years, unless they can demonstrate that the insured knowingly and intentionally misrepresented relevant health facts. This change is designed to provide policyholders with greater security and peace of mind, ensuring that they are not unfairly penalized for minor misstatements made during the application process.

Additionally, the bill introduces nonforfeiture benefits, allowing policyholders to retain some benefits even if they stop paying premiums. Insurers will be required to offer these benefits as part of limited long-term care insurance policies, providing a safety net for consumers facing financial difficulties. The legislation mandates that if a policyholder does not opt for a nonforfeiture benefit, they must still receive a contingent benefit if there is a substantial increase in premium rates.

The bill has sparked discussions among lawmakers and stakeholders, with some advocating for stronger consumer protections while others express concerns about the potential impact on insurance premiums and the overall market. Experts suggest that while the bill aims to protect consumers, it could lead to higher costs for insurers, which may be passed on to policyholders in the form of increased premiums.

As Senate Bill 2457 moves through the legislative process, its implications for Minnesota's long-term care insurance landscape are becoming clearer. If passed, the bill could significantly alter how insurers operate and how consumers engage with long-term care policies, ultimately shaping the future of care for Minnesota's aging population. The next steps will involve further debates and potential amendments as lawmakers work to balance consumer protection with the sustainability of the insurance market.