NY Ins L § 3230 (2021)
2021 New York Laws ISC - Insurance Article 32 - Insurance Contracts - Life, Accident and Health, Annuities 3230 - Accelerated Payment of the Death Benefit or Special Surrender Value Under a Life Insurance Policy.

§  3230. Accelerated payment of the death benefit or special surrender value under a life insurance policy. (a)  The  application  for  a  life insurance  policy or policy rider which provides for accelerated payment of death benefits or a special surrender value shall:  (1) contain a notice,  prominently  displayed,  to  read  as  follows: "Receipt of accelerated death benefits may affect eligibility for public assistance programs and may be taxable."; and  (2) include  the  amount of any additional premium associated with the accelerated payment or, if there is no separately identifiable  premium, whether a discount is associated with acceleration.  (b) The application to accelerate benefits shall:  (1) be  dated  by  the insurer upon transmittal and shall be completed and signed by the policy owner not more than thirty days thereafter; and  (2) contain a notice,  prominently  displayed,  to  read  as  follows: "Receipt of accelerated death benefits may affect eligibility for public assistance  programs  such  as  medical  assistance  (medicaid),  family assistance and supplemental  security  income.  Receipt  of  accelerated death  benefits  in  periodic  payments  may be treated differently than receipt in a lump sum. Prior to applying for accelerated death benefits, policyowners should consult with the appropriate social services  agency concerning  how  receipt  will  affect  the eligibility of the recipient and/or the recipient's spouse or dependents."  (3) contain a notice,  prominently  displayed,  to  read  as  follows: "Receipt  of  accelerated  death  benefits  may  be  taxable. Receipt of accelerated  death  benefits  in  periodic  payments  may   be   treated differently  than  receipt  in  a  lump  sum. Prior to applying for such benefits, policy owners should seek  assistance  from  a  qualified  tax adviser."; and  (4) contain  a  statement by the policy owner that such application is voluntary and without coercion on the part of any third party; and  (5) contain a statement of the remaining death  benefit  available  to the beneficiary.  (c)  Insurers are prohibited from paying accelerated death benefits or special surrender values to the policy owner or certificate holder for a period of five days from the date on which the information specified  in subdivision  (d) of this section is transmitted in writing to the policy owner or certificate holder. The  policy  owner  or  certificate  holder shall  have  the  right  to rescind the request for such payments at any time during the process of application for said benefits.  (d) Within five  day  of  receipt  of  an  application  to  accelerate benefits an insurer must provide the policy owner with the following:  (1) an  illustration  demonstrating  the  effect  of  the  accelerated benefit on the policy's cash value and policy loans;  (2) a numerical computation of the amount of the death  benefit  which would be payable upon death;  (3) a  numerical  computation  of the amount of the death benefit that would be payable upon acceleration; and  (4) a notice that other means may be available to achieve the intended goal, including a policy loan.  (e) A group life  insurance  policy  which  provides  for  accelerated payment of death benefits or a special surrender value must provide that only the certificateholder has the right to accelerate the benefits.  (f)  This section shall apply to all life insurance policies or policy riders or provisions thereof that provide  for  accelerated  payment  of death  benefits  or  a  special surrender value pursuant to subparagraph (A), (B), (C), (D), (E) or (F) of paragraph one  of  subsection  (a)  of section one thousand one hundred thirteen of this chapter.