A new law in Maine requires life insurance companies to advise senior life insurance policy owners that life insurance settlements are an alternative to surrendering their policy or allowing it to lapse.
The law, Chapter 376, ensures that policy owners can ask their life insurance company for the value in the secondary market for policies that would otherwise be surrendered or lapsed.
The law requires insurance companies to notify Maine seniors facing the termination of their policies that settlements are a financial alternatives. Insurers must include in the notice a brochure that tells seniors of their rights as a policy owner and describes life settlement products.
The law also prohibits insurers from impairing life settlement transactions.
Doug Head, executive director of the Life Insurance Settlement Association, Orlando, Fla., points out that the state of Washington recently adopted a similar law.
“These new laws are terrific developments for senior consumers and are expected to be adopted in numerous states,” said Head.
Comparable measures are under consideration in Indiana and Kentucky, LISA reports.
Maine’s law was sponsored by State Senator Nancy Sullivan.