NCOIL Comment Letter II: Consumer Disclosure Law

The Honorable Ronald Crimm
Vice-Chairman
Life Insurance and Financial Planning Committee
National Conference of Insurance Legislators
385 Jordan Road
Troy, NY 12180

September 22, 2010

On behalf of Life Care Funding Group, I thank you for the opportunity to offer these additional written comments in support of the Life Insurance Consumer Disclosure Legislative Model currently under development by NCOIL. I previously submitted written comments on September 7, 2010.

We wanted to take a moment to reiterate our support for the Consumer Disclosure Legislative Model currently being considered by NCOIL. Our company specializes in helping people in need of long term care pay for expenses by converting a life insurance policy into a long term care benefit plan.

The families we work with are middle class and typically have owned a small face value life insurance policy for many years that was originally taken out to protect their families. As they are now aged with adult children, the reason for owning the policy is no longer relevant to them and for the most part they can no longer afford their premium payments. They are faced with financial decisions about how they are going to pay for long term care needs and look at the cost of keeping their policy as unaffordable and unnecessary.

They are preparing to allow their policy to lapse, or possibly surrender it for minimal cash value, and when they consult with their life insurance company they are given no other options. For those that learn there are actually a number of alternative options available to them, the policy can potentially become part of the financial solution they and their family are looking for while they are still alive.

Life Care Funding Group converts the life insurance policy into a long term care benefit that helps defray the expensive costs of long term care—and keeps them off of Medicaid as their spend down period as a private pay patient can be extended for many months. When faced with the choice of allowing a policy for which they have paid premiums for years to lapse or be surrendered, or converting it into a significant long term care benefit, the choice for those families we have helped is obvious.

We urge NCOIL and every state in the Union to adopt the model consumer disclosure legislation so people have the benefit of as much information as possible about their policy options. The opportunity to help families in need and States facing Medicaid budget problems is too big to ignore.

Attached with our comments is a testimonial letter from one of the families we recently helped through our program attesting to the fact that a policy they did not plan to keep ended up making all the difference in their lives when they converted it to a long term care benefit.

I thank you again for this opportunity to provide comments, and look forward to being a resource to NCOIL’s efforts to ensure the consumer has access to more, and not less, information and options.

Sincerely,


Chris Orestis
President
Life Care Funding Group