Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 55.00 - Disclosure Requirements For Life Insurance Policies With Accelerated Benefit Provisions And Annuity Contracts With Waivers Of Surrender Charges For Early Withdrawal Of Annuity Proceeds In The Event Of Total And Permanent Disability
Section 55.110 - Required Disclosure at the Time of Application for Acceleration of Life Insurance Benefits or Early Withdrawal of Annuity Proceeds with a Waiver of Surrender Charges
Current through Register 1531, September 27, 2024
(1) Required Disclosure at the Time of Application for Acceleration of Life Insurance Benefits [The disclosure statement shall be substantially similar to the following form.]
The accelerated benefit in this life insurance product may provide benefits to pay for long-term care services, but it is NOT part ofa long-term care or nursing home insurance policy and the amount this product pays you may not be enough to cover your medical, nursing home or other bills. You may use the money you receive from this product for any purpose, unless you qualify for benefits because of Chronic Illness only. If you qualify for benefits because of Chronic Illness only, you may use the benefits to pay for Qualified Long-Term Care Services only. Unlike conventional life insurance proceeds, accelerated benefits payable under this product rider COULD BE TAXABLE IN SOME CIRCUMSTANCES. We recommend that you contact a tax advisor when making tax-related decisions about electing to receive and use benefits from an accelerated benefit product.
Consequences of this Benefit
Receipt of accelerated death benefits from a life insurance policy MAY AFFECT MEDICAID and SUPPLEMENTAL SECURITY INCOME ("SSI") ELIGIBILITY. The mere fact that you own a policy with an option to accelerate the death benefit may affect your eligibility for these government programs. In addition, exercising the option to accelerate death benefits and receiving those benefits before you apply for these programs, or while you are receiving government benefits, may affect your initial or continued eligibility. Contact the Medicaid Unit of your local Division of Medical Assistance and the Social Security Administration for more information.
[(Either of the following sections should be used except in cases that the policy uses the lien method described in 211 CMR 55.06(3)(c).)
[Carrier shall show amount and date of reduced value.]
[Carrier shall include values at all ages pertaining to the individual, and the effect of the accelerated payment.]
Age 40: ___ Age 50: ___
Age 60: ___ Age 65: ___
Age 70: ___ Age 75: ___
[Carrier shall include outstanding premium payment requirements to keep policy in force, when distribution is other than a lump sum payment.]
OR
A. Effect on Policy Values: Cash values, loan values, and the death benefit WILL BE REDUCED if you receive an accelerated benefit. Here is an illustration of the effect of an accelerated benefit payment on your life insurance policy:
[The illustrationshould include the following values for policy years 1-10, and every five years after that to age 100:
[Values shown may be for the BEGINNING or the END of the policy year, but it must be clearly indicated which is used.]
[Values may be CASH values or CASH SURRENDER values, but it must be clearly indicated which is used.]
[Values shown may be GUARANTEED or NONGUARANTEED, but it must be clearly indicated which is used. In addition, if nonguaranteed values are shown, it must be clearly noted that the interest rate could change.]
[The illustration should show the existence of a policy loan.]
Policy interest rate: [xx%] [Not applicable]
Discount Rate used to determine accelerated benefit: [xx%] [Not applicable]
[(The following sections should be used in cases that the policyuses the lienmethod described in 211 CMR 55.06(3)(c).)
The illustration should show the effect of the accelerated benefits including any reasonable administrative expense charges, future premiums and accrued interest which may be considered a lien against the death benefit or annuity proceeds of the underlying policy or rider, and whether access to the cash value and additional policy loans may be restricted as long as it is no more restrictive than access to the excess of the cash value over the sum of any other outstandingloans and the amount of the lien.]
(2) Required Disclosure at the Time of Application for Waiver of Surrender Charge on Early Withdrawal of Annuity Proceeds Where Less than the Full Value is Withdrawn
[The disclosure statement shall be substantially similar to the following form.] Consequences of this Benefit
Receipt of an early withdrawal on annuity proceeds MAY AFFECT MEDICAID and SUPPLEMENTAL SECURITY INCOME ("SSI") ELIGIBILITY. The mere fact that you own a policy with an option to make an early withdrawal on annuity proceeds without a surrender charge may affect your eligibility for these government programs. In addition, exercising the option to make an early withdrawalonannuityproceeds and receiving those benefits before you apply for these programs, or while you are receiving government benefits, may affect your initial or continued eligibility. Contact the Medicaid Unit of your local Division of Medical Assistance and the Social Security Administration for more information.
[Carrier shall include values at all ages pertaining to the individual, and the effect of an early withdrawal.]
[Carrier shall list any outstanding policy loans, and the effect of an early withdrawal.]]
________________ ______________________
Signature of Applicant Signature of Carrier Representative
