“Accelerated benefits” are benefits payable under a life insurance contract: To a policy owner, during the lifetime of the insured, in anticipation of death or upon the occurrence of specified life-threatening or catastrophic conditions as defined by the policy or rider; Which reduce the death benefit otherwise payable under the life insurance contract (excluding accidental […]
Accelerated benefit riders and life insurance policies with accelerated benefit provisions do not represent morbidity risks.
Prior to the payment of the accelerated benefit, the insurer shall receive from any assignee or irrevocable beneficiary a signed acknowledgement of concurrence for payout.
The benefit shall be paid in a lump sum, or in periodic payments for a fixed period of time, or in a fixed amount for an indefinite period of time, at the option of the insured. Companies may set minimums on the face amount of contracts for which the benefit shall be offered.
The name given the coverage must be descriptive of the coverage provided, and the terminology “accelerated benefit” shall be included in the description. Clear disclosure is required at the time of application for the policy and at the time the accelerated benefit payment request is submitted of the potential tax implications of receiving this payout. […]
The accelerated benefit shall be effective on the effective date of the policy or rider.
The accelerated benefit provision may or may not provide for the waiver of premium in the absence of a regular waiver of premium provision being in effect. At the time the benefit is claimed, the company shall explain any continuing premium requirement to keep the policy in force.
Insurers shall not unfairly discriminate among insureds with differing qualifying events or among insureds with similar qualifying events. Insurers shall not apply further conditions on the payment of the accelerated benefits other than those conditions specified in the policy or rider.
The company shall disclose to the consumer any separate identifiable premium for the accelerated benefit. Those companies indicating that this accelerated benefit is offered without additional premium shall furnish a written explanation to the State Insurance Department when filing the product. Two (2) options are available to finance the benefit: The insured may make an […]
At the time of filing of the policy form, the valuation method and assumptions need to be filed with the Department of Insurance. The assumptions should reflect the statutory mortality and interest rate assumptions for life insurance policies and appropriate assumptions for the other provisions incorporated in the policy form.
