Posted by (American Life Insurance Guide Net 10/21/2019 Irvine) California Governor Gavin Newsom formally signed the AB1209 bill a few days ago, which aims to strengthen the supervision of the life insurance industry and protect the interests of policyholders.
The billIt is mainly aimed at insurance policies that contain additional clauses for "long-term care" and allow the insured to withdraw the death compensation in advance while alive, and can withdraw cash value by borrowing or withdrawing.
This type of insurance policy is usually referred to in the Chinese community as having "Welfare"The whole life life insurance.
Specific impact
At this stage, for the "Welfare"Life insurance policy, if we start to withdraw while we are alive"Long-term care", then the insurance company will "prohibit" or "restrict" us from borrowing or withdrawing the cash value from the policy at the same time.
The new bill states that unless otherwise specified,Insurance companies cannot "prohibit" or "restrict" policyholders from receiving "long-term care" claims while at the same time taking money from the cash value of the policy.
The new bill also states that if you withdraw in advance "Long-term care"The compensation has caused a sharp drop in the cash value of the policy, and this situation will affect future borrowing from the policy.
After receiving the first "Long-term care"30 days before the advance payment of benefits, the insurance company should send a statement to the policyholder, providing detailed information about the insurance policy and the benefits related to "long-term care", including the damage caused to the policy due to the occurrence of the payment. Believe the description of any impact.
If you withdraw in advance during your lifetime "Long-term care benefits", it will affect the borrowing of the policy and the withdrawal of cash value, so the insurance company must issue a warning to the policyholder.
If it is integrated "Long-term care"For universal insurance types of protection, such as index universal insurance, investment universal insurance, and protection universal insurance, then the insurance company must provide information disclosure about the possible termination of the insurance policy, and provide an optional clause to protect the insurance policy. The holder is free from the risk of discontinuation of the guarantee.
Industry impact
The law will be officially implemented on January 2021, 1, and is currently limited to California.However, since California is a huge market for the life insurance industry, I believe the implementation of the bill will also arouse discussion in other states.
(Reported by American Life Insurance Guide Network)
