State insurance regulators have approved a major update of a document that helps consumers understand how life insurance works.
Members of the National Association of Insurance Commissioners agreed Tuesday to adopt a new version of the NAIC’s Life Insurance Buyer’s Guide.
NAIC made the move in Boston, at a session held at the end of the NAIC’s four-day summer national meeting.
A top-level NAIC committee, the NAIC’s Life Insurance and Annuities Committee, has also agreed to start a project to develop an online resource for life insurance.
The NAIC is a group for regulators. Some states may adopt the guide as is. Others may pass it by, or develop their own, somewhat different versions of the guide.
The NAIC completed the current version of the guide in 2007.
The NAIC Life Insurance Buyer’s Guide Working Group began working on the guide update in early 2017. Representatives from groups such as the American Academy of Actuaries, the American Council of Life Insurers, the Council for Economic Justice, the Life Insurance Settlement Association and the National Association of Insurance and Financial Advisors have been active in shaping the update.
Interest group reps expressed some concerns about the content in the early drafts, but they later came to an agreement on the substance and focused mainly on making the guide easier to understand.
Mary Mealer, the chair of the buyer’s guide working group, and a regulator with the Missouri Department of Insurance, Financial Institutions & Professional Registration, moved for the working group to adopt the buyer’s guide draft July 19, during a conference call, according to a meeting summary included in a summer national meeting document packet.
Mealer told working group members the guide is a “simplified guide designed to provide consumers with succinct information about the basics of life insurance — enough information to be able to ask additional questions,” according to the meeting summary.
The working group adopted the draft during that call.
The working group’s parent, the Life Insurance and Annuities Committee, approved the draft at a meeting Sunday.
The Life Insurance and Annuities Committee has renamed the buyer’s guide working group and given it a new name: the Life Insurance Online Guide Working Group. The working group will now be responsible for developing an online life insurance tool.
Mealer has suggested, in a slidedeck presented at the Life Insurance and Annuities Committee meeting Sunday, that the online tool could offer a life insurance calculator; a choice between information aimed at new buyers and people with questions about policies they already owned; and a discussion of options for policyholders who can no longer afford the policy premiums.
In a draft showing what an online life insurance needs calculator might look like, for example, Mealer gives the question, “What would you like your life insurance to provide coverage for?”
The choices now in the draft are funeral cost, home mortgage, college fund, offset household’s lost income, other debt and other needs.
Mealer suggested that the online tool could also give users the option, “What Types of Products Are Available?”
Users who click on that link might see a page listing product types such as term life, whole (permanent) life, universal life, indexed universal life, variable life, and variable universal life, according to the mockup.
If the consumer clicked on the name of the product, the consumer would then see a page with product-specific information, according to the mockup.
A link to the meeting materials packet that includes Mealer’s online presentation tool is available here.
More resources related to the buyer’s guide and online tool projects are available on the website of the buyer’s guide working group.
— Read Regulators Tackle Life Buyer Guide Update, on ThinkAdvisor.