Media Contact: Erin Klug Public Information Officer (602) 912-8456
For Immediate Release January 5, 2004
Insurance consumers shopping for life insurance or annuities may find the experience a bit easier now that provisions of a new law went into effect1. The law establishes new requirements for insurers and producers who sell new or replace existing life insurance policies and annuity contracts.
“Because there are significant penalties for early termination of both life and annuity contracts, it is imperative that consumers understand the ramifications of “replacing” a life policy or annuity contract,” said Christina Urias, Director of Insurance. “These insurance contracts are quite complex and certain changes may carry substantial financial consequences, so that a consumer’s understanding the benefits and limitations of their purchases is crucial. The new laws increase the amount of information available to both life and annuity applicants early in the purchasing process and gives annuity applicants additional time to assure informed decisions.”
Although Arizona law already required certain protections for life insurance applicants, HB 2186 created parallel protections for annuity purchasers. Here are some of the new protections:
Annuity purchasers age 65 or older on the date of application now have a 30 day “free look period” (increased from 10 days). This means the applicant has 30 days to review the annuity and return it without penalty for any reason within the “free look period.” This provision2 took effect 9/18/03.
Informed Decision Making