Life insurers and consumer groups are skirmishing over what every individual life insurance shopper should know about permanent life insurance products.
A team of state insurance regulators is looking at that issue, and others, as it continues to work on a revision of the National Association of Insurance Commissioners’ Life Insurance Buyer’s Guide.
(Related: Regulators Tackle Life Buyer Guide Update)
The current edition of the NAIC’s buyer’s guide already tells shoppers that the death benefit from employer-provided life insurance “is usually far below what you need.”
The NAIC names people to speak up for consumers in NAIC proceedings.
The NAIC’s buyer’s guide includes a section with the title “Compare the Different Kinds of Insurance Policies.” The current version states that “there are two basic types of life insurance: term insurance and cash value insurance.”
“Cash value life insurance may be one of several types: whole life, universal life, and variable life,” according to the current version.
The consumer reps want the NAIC to keep that section pretty much the same.
The American Council of Life Insurers has suggested rewriting some of the definitions for products such as universal life insurance and whole life insurance.
The ACLI also wants to see the guide emphasize the need for a consumer to talk to a professional advisor — such as a life insurance agent, financial planner or lawyer — when selecting the beneficiaries for the death benefits, rather than offering a suggestion such as “Consider leaving the money to your estate or trust.”