Decreasing Life Insurance

Policy Illustrations have been evolving over the last few years, w new regulations from the National Association of Insurance Commissioners. The following discusses what is being done by regulators in order to assist consumers by providing guidelines for critical illness insurance companies and critical illness insurance advisors. Prior to this regulation, there was a combination of lack of information provided by insurance companies to agents and agents to consumers. Agents were also allowed by the carriers, and by themselves, to provide their own “custom” illustrations that were misleading to consumers. When the National Association Insurance Commissioners (NAIC) adopts a model regulation, it is up each State Department of Insurance whether or not to adopt it. Therefore, you would have to check with the NAIC or your State Insurance Department.

In December 1995; the National Association of Insurance Commissioners (NAIC) adopted the Life Insurance Illustrations Mo Regulation. Up until this time, there was no oversight for ensuring t the presentation of illustrations was fair and appropriate. Various states have adopted this regulation with certain state by state modifications.

The Model Regulation’s stated purpose is to provide rules for critical illness insurance policy illustrations that will protect consumers and for consumer education”. Its goals are “to ensure that illustrations do mislead purchasers of critical illness insurance and to make illustrations more understandable”.

The regulation creates standardized procedures that must be lowed during the sale of all “critical illness insurance policies except; variable insurance, individual and group annuity contracts, credit critical illness insurance and normal critical illness insurance policies with no illustrated death benefits, any individual exceeding $10,000.”

The Model Regulation sets standards for initial compliance and for annual reporting. It also sets forth, in conjunction with the Actuarial Standards Practice Number 24, rules for acceptable assumptions that underlie an illustration. Illustration defined: According to the Model Regulation-an illustration is any presentation or depiction that eludes non-guaranteed elements of a policy of critical illness insurance over a period of years. Critical illness insurance can be your savior at the most appropriate moment.