|Posted:||October 10, 2013 03:19 PM|
|From:||Senator Jake Corman|
|To:||All Senate members|
|Subject:||Life Insurance Consumer Disclosure Act|
|In the near future, I plan to introduce legislation designed to inform individuals who may own life insurance policies subject to lapse or surrender as part of the Medical Assistance spend-down process, of their ability to convert these policies to long term care insurance or a life settlement. I believe this policy will benefit both the individual and the Commonwealth.
Currently, in order to qualify for Medical Assistance, Commonwealth residents are allowing life insurance policies with monetary value to lapse or are surrendering these policies outright for significantly less than market value. Few know that other options are available, including life settlements. A life settlement is the sale of an existing life insurance policy to a third party for more than its cash surrender value, but less than its net death benefit.
My legislation would require Medicaid programs to proactively notify applicants or prospective eligible individuals of life settlement conversion options. Additionally, the bill exempts life settlements from countable resources for eligibility for Medicaid or taxation.
The proposed legislation is designed to generate an increased value of life insurance policies for the owners and generate savings for the Commonwealth by providing these individuals with greater resources to manage their care.
If you have any questions about this legislation, please feel free to contact my office at 717-787-1377.
Introduced as SB1296