239 / How does the Department of Labor fiduciary standard impact advisors who sell life insurance or disability insurance?

Under the second Trump administration, after multiple legal challenges, the DOL’s 2024 efforts to reform the investment advice fiduciary standard have been put on hold. The 1975 five-part test continues to apply as of the date of this publication. See Q 3986 for more details.

Under the 2016 standard, advisors who provide advice relating to health savings accounts were to be covered by the Department of Labor’s heightened fiduciary standard, certain related products, such as disability and term life insurance policies, were expressly excluded from the definition of investment property and were thus not subject to the fiduciary standard. This would have been the case to the extent that these products do not contain an investment component. As a result, presumably, permanent life insurance policies that did contain an investment component would have been subject to the DOL Obama and Biden-era fiduciary rules.¹