Over the past year, a handful of state legislatures deliberated the merits of a variety of consumer-friendly initiatives involving life settlements.
Many seniors are not yet aware of the life settlement option for unwanted policies, so the recent increase in legislative activity helps advance the industry by broadening consumer awareness.
Six states − Kentucky, Maine, New Hampshire, Oregon, Washington and Wisconsin − already require some type of disclosure that informs consumers who are about to lapse or surrender a policy about the life settlement option.
This is positive news for the industry because prudent regulatory oversight helps boost consumer confidence that the transaction is a safe and effective solution for unwanted policies.
Industry statistics show that an increasing number of seniors over 65 are selling their unwanted policies to pay for long-term care and medical expenses.
While it’s clear that more policy owners are discovering the advantages of selling their unwanted policies versus allowing them to lapse, it’s noteworthy that more and more states are also recognizing the wisdom of consumers being able to sell policies in the secondary market and using the proceeds to pay for medical-related expenses as they age.
It’s no secret that many states are bracing for the potential impact of federal budget cuts that slash government spending on Medicaid coverage. So it becomes logical that more states are “thinking outside the box” as it relates to methods to help fund nursing home care for financially-strapped seniors.
As it stands now, 43 states and the territory of Puerto Rico have life settlement regulations in place. This means that approximately 90% of the U.S. population falls under state regulatory protection. The industry has made great strides over the past 20 years to strengthen the industry through regulation, but more needs to be done to ensure that all seniors are aware of the option to sell their life insurance assets.
The Massachusetts legislature is considering a bill that allows seniors to pay for long-term care with the proceeds from life settlements. New Jersey considered a similar initiative earlier this year but the measure died when the two-year session ended.
In Rhode Island, several bills are currently under consideration that would require insurance companies to notify policyholders 60 years or older that they may be able to sell their policies instead of lapsing them or surrendering them back to insurance companies. Although similar legislation failed to pass last year, the industry’s trade association plans to monitor the initiatives and continue to push for passage.
Last year, Florida’s governor signed into law a bill with consumer-disclosure language that states policy owners should seek advice from their agents if they’re thinking of making a change in the status of their policies.
The Texas legislature considered an anti-retaliation initiative last year that would prohibit insurers from disciplining life insurance agents who discuss life settlements with their clients. However, the measure died when the session adjourned.
According to the Life Insurance Settlements Association, the non-profit organization will continue to advocate for passage of consumer disclosure laws that promote awareness of life settlements.
If you are interested in learning whether you qualify for a life settlement, feel free to contact us at
1-800-216-2513, or explore our website at www.TrustLifeSettlements.com.