§ 7812 — Life insurance applications

New York § 7812

• Jurisdiction: New York
• Law ISC: Insurance
• Art. 78: Life Settlements

Text

§ 7812. Life insurance applications. (a) Without limiting the ability\nof an insurer to assess the insurability of a policy applicant and to\ndetermine whether or not to issue the policy, and in addition to other\nquestions an insurer may lawfully pose to a life insurance applicant,\ninsurers may inquire in the application for insurance whether the\nproposed owner intends to pay premiums with the assistance of financing\nfrom a lender that will use the policy as collateral to support the\nfinancing.\n (b) The insurer may include the following notice to the applicant and\nthe insured, or other notice acceptable to the superintendent, on the\napplication or as an amendment thereto: "If you enter into a loan\narrangement where the policy is used as collateral, and the policy\nchanges ownership at some point in the future in satisfaction of the\nloan, then the following may be true:\n (1) a change of ownership may lead to a person unknown to you owning\nan interest in the insured's life;\n (2) a change of ownership may limit your ability to purchase insurance\nin the future on the insured's life because there is a limit to how much\ncoverage insurers will issue on one life;\n (3) if ownership of the life insurance policy changes, and you wish to\nobtain more insurance coverage on the insured's life in the future, the\ninsured's higher issue age, a change in health status, and/or other\nfactors may reduce the ability to obtain coverage and/or may result in\nsignificantly higher premiums; and\n (4) you should consult a professional advisor, since a change in\nownership in satisfaction of the loan may result in tax consequences to\nthe owner."\n