Acceleration of death benefits
- • rules
(1) A life insurance policy or a rider to a life insurance policy may provide for the acceleration of death benefits as part of the life insurance coverage. For purposes of this section, accelerated death benefits are benefits that:
(a) Are payable to the policy owner or certificate holder during the lifetime of the insured, in anticipation of death or upon the occurrence of specified life-threatening or catastrophic conditions as defined by the policy or rider;
(b) Reduce the death benefit otherwise payable under the life insurance policy; and
(c) Are payable upon the occurrence of a single qualifying event that results in the payment of a benefit amount fixed at the time of acceleration.
(2) For purposes of this section, a qualifying event is one or more of the following:
(a) A medical condition that will result in a drastically limited life span, as specified in the policy or rider, not exceeding 24 months.
(b) A medical condition that has required or requires extraordinary medical intervention, such as a major organ transplant or continuous artificial life support, without which the insured would die.
(c) Any condition that usually requires continuous confinement in an eligible institution, as defined in the policy or rider, if the insured is expected to remain there for the rest of the insured’s life.
(d) A medical condition that in the absence of extensive or extraordinary medical treatment will result in a drastically limited life span. Such conditions may include but are not limited to one or more of the following:
(A) Coronary artery disease resulting in an acute infarction or requiring surgery;
(B) Permanent neurological deficit resulting from cerebral vascular accident;
(C) End-stage renal failure; or
(D) Acquired Immune Deficiency Syndrome.
(e) Any other event determined by the Director of the Department of Consumer and Business Services to be life-threatening.
(3) A policy or rider that provides for the acceleration of death benefits:
(a) Must also provide for the continuation of the policy as to the amount of the death benefit that is not accelerated.
(b) Must allow the policy owner or the certificate holder to request payment at any time during the period that the qualifying event continues.
(4) A policy or rider that provides for the acceleration of death benefits under this section shall not be described or marketed by an insurer as long term care insurance or as providing long term care benefits.
(5) The director shall adopt rules establishing minimum benefits, criteria for the payment of accelerated benefits, disclosure requirements and actuarial standards. [1991 c.571 §2; 1993 c.17 §1]
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