Washington Administrative Code › Title 284 - Insurance Commissioner, Office of the › Chapter 284-97 - Life settlement regulation › Section 284-97-925 - Insurance company disclosure form for term life insurance policies

Current through Register Vol. 24-14, July 15, 2024
RCW  48.102.100 requires that
				insurers provide a notice to owners of individual life insurance policies at
				certain times. The following is the only document approved by the commissioner
				to give this notice for term life insurance policies.
Important information about your term life insurance
				policy
from the State of Washington Office of the Insurance
				Commissioner
Life insurance is a critical part of a broader financial
				plan. There are options available to you rather than letting your policy lapse,
				and you have the right to shop around and seek advice from different financial
				advisers in order to find the option best suited to your needs.
You are encouraged to consider the following possible
				alternatives to letting your term life insurance policy lapse. These
				alternatives include, but are not limited to:
. Life Settlement:
You may be able to sell your
				term life insurance policy to a third party. You pay no further premium. The
				third party becomes the policyholder and receives the benefit upon the
				insured's death.
. Maintain Your Policy:
You may be able to
				maintain your term life insurance policy in force by paying the premiums
				directly.
. Third-Party Loan:
You may be able to get a loan
				from another party to pay your policy's premiums. In return, the lender may
				require an assignment of a portion or all of the policy's death benefits.
These options may or may not be available depending on your
				circumstances and the terms of your life insurance policy. Please see your
				policy or contact your life insurance company, financial advisor, insurance
				producer to determine your particular options.
If you're a Washington state resident and have questions about
				life insurance and your rights, contact the Office of the Insurance
				Commissioner at 1-800-562-6900, or go to
www.insurance.wa.gov
. Ask questions if you
				don't understand your policy. Here's a list of commonly used terms:
Expected death benefit:
The face amount of the
				policy, less any policy loan amounts, that the insurance company is expected to
				pay the beneficiaries named in the life insurance policy upon the death of the
				insured.
Lapse:
Refers to a life insurance policy ending or
				expiring when a policyholder stops making premium payments.
Life settlement:
Refers to a contract in which
				the policyholder sells his or her life insurance policy to a third party for a
				one-time cash payment. A life settlement includes a viatical settlement,
				defined below.
Viatical settlement:
An arrangement in which
				someone with a terminal illness sells his or her life insurance policy at an
				amount less than the death benefit. The ill person receives cash, and the buyer
				receives the full amount of the death benefit. This death benefit is payable
				once the former policyholder dies.
This brochure is for informational purposes only and
				does not constitute an endorsement of any of the options described
				above.
Statutory Authority:
				  RCW
				  48.02.060,
				  48.102.100, and
				  48.102.170. WSR 13-13-021 (Matter
				  No. R 2012-31), §
										284-97-925, filed 6/12/13,
				  effective 9/1/13.