What NCOIL’s Life Insurance Consumer Disclosure Model Act Means
Too often when seniors and their families contact their life insurer about their old policies, they are given only three options: surrender the policy for its cash value (if it has any), pay the premium or let it lapse.
Most people who receive a lapse notice have a policy with no cash value because it has already been drained by the carrier to make premium payments. That typically leaves a final option of paying the premium or walking away. The number of seniors allowing this to happen to a policy after paying premiums, sometimes for decades, is scandalously high. State law makers around the country have noticed this situation and are now taking action to make sure policy owners are informed of their options before they abandon a life insurance policy.