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 1525, July 5, 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).)
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:
(1)
			 Policy Face Amount: ______________________________________________
(2) Amount to be Accelerated:
			 _________________________________________
(3) Interest Rate:
			 __________________________________________________
(4) Reduced Face Amount of Policy:
			 _____________________________________
[Carrier shall show amount and date of reduced
				value.]
(5) Cash Values:
[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: ___
(6) Premium Necessary to Keep Policy in
			 Force:
[Carrier shall include outstanding premium payment requirements
				to keep policy in force, when distribution is other than a lump sum
				payment.]
(7) Policy Loans:
			 ___________________________________________________ [Carrier shall list any
			 outstanding policy loans, and the effect of an accelerated benefit 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:
1. Insured's age
2. Face amount of policy
3. Cash value of policy
4. Premium needed to keep the policy in
			 force]
[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.]