OAR 836-051-0330: Disclosure

(1) An accelerated benefit provision shall include “accelerated benefit” or “accelerated death benefit” as part of the descriptive title. The policy, certificate or rider schedule must: (a) Include one of the following: (A) Any premium or cost of insurance charge designated for the accelerated benefit; (B) The interest rate if fixed; or (C) The method used by the insurer to establish the interest rate in OAR 836-051-0370(3); and (b) Disclose any administrative expense charge associated with the exercise of the accelerated benefit. (2) When a life insurance policy or certificate containing an accelerated benefit provision is applied for or delivered, or when an accelerated benefit rider to a life insurance policy is applied for, delivered or added, the insurer shall give or cause to be given a summary of coverage described in this section to the applicant for the policy, certificate or rider. The description must include all of the following: (a) A brief summary of the accelerated benefit and definitions of the conditions or occurrences triggering payment of the benefit; (b) An explanation of any effect of the payment of an accelerated benefit on the cash value, accumulation account, death benefit, premium payments, any loans or liens. (c) Disclosure of the basis for payment, whether a premium, cost of insurance charge, lien assessment or present value calculation; (d) A statement that receipt of the accelerated benefit may be taxable and that assistance should be sought from a personal tax advisor. (3) When an accelerated benefit option is exercised, the insurer shall provide the following to the policy holder or certificate holder and any irrevocable beneficiary: (a) An illustration that: (A) Numerically demonstrates any effect the payment of the benefit will have on the cash value, accumulation account, death benefit, premium payments, any loans or liens; (B) Separately illustrates the loaned amount from the accelerated risk amount if the acceleration is based on a lien and the interest accrued on the two portions are not at the same rate; and (C) Includes a statement that receipt of accelerated benefit payments may adversely affect the recipient’s eligibility for Medicaid or other government benefits or entitlements, that benefits may be taxable and that assistance should be sought from a personal tax advisor. (b) An amended schedule page showing any new, reduced in-force face amount and the continuing premium requirements to keep the remaining coverage in force.