02-031 C.M.R. ch. 240, 031-240 app B

Current through 2022-14, April 6, 2022

LIFE INSURANCE SOLICITATION AND COST DISCLOSURE

PRELIMINARY STATEMENT OF POLICY COST FORMAT

This Appendix contains the form to be used by all insurers for the Preliminary Statement of Policy Costs as defined in Subsection 4(F) of the Maine Life Insurance Solicitation and Cost Disclosure Rule (hereinafter referred to as the Rule), unless an illustration subject to the requirements of Rule Chapter 910 is used or unless approval of an alternate format is granted by the Superintendent pursuant to Subsection 4(F) of the Rule.

The Bureau of Insurance expects each life insurer to provide sufficient copies of the form to its marketing force and to instruct it in use of the form consistent with the Maine Insurance Code andRules.

Each insurer is also expected to establish a procedure to see that such form is processed in a manner that enables the insurer to comply with Subsection 5(D) of the Rule.

It is contemplated that the Preliminary Statement of Policy Cost will be capable of full completion by the agent in the large majority of sales situations. The Bureau of Insurance, however, realizes that specific situations may arise when an agent's ability, in good faith, to complete the form may be limited. In these situations the Bureau of Insurance expects a good faith effort on the part of the agent to complete the form to the fullest extent reasonably possible. Sufficient information should be noted on this form so that the applicant understands the nature of and basic reason for any incomplete answers.

It is expected that each insurer will require its agents to answer fully all questions for which the appropriate information is available or should be available to the agent.

All insurers are expected to provide sufficient data and training to their agents, so that the agents can provide 10 and 20 year surrender and net payment cost indexes as defined in Section 4 of the Rule, on a preliminary basis, given an applicant's age, sex and size of the proposed policy applied for.

Required use of this form in no way affects the use or distribution of any other sales material by an insurer or agent.

It should be stressed that the intent of this form is to provide applicants with basic preliminary data concerning specific life insurance contracts at a point in the sales process prior to issuance or delivery of the policy. The Preliminary Statement of Policy Costs is not, however, intended to include such extensive data as is contained in the final Policy Summary. Nor is there any intent to require agents to convey information beyond their ability to know or to create excessive market distortions.

The format to be used by all insurers is as follows:

NAME OF INSURER

ADDRESS OF INSURER

PRELIMINARY STATEMENT OF POLICY COST

For ______________________________________________ _____________ _____________

(Proposed Insured) (Age) (Sex)

Policy Name ___________________________________________________________________

IMPORTANT NOTICE

BEFORE YOU BUY ANY LIFE INSURANCE, you should:

Decide how much life insurance you need. Figure out how much you can afford to pay in premium. You should not buy a policy unless you can afford the premiums and intend to stick with it. A policy which is a good buy when held for 20 years can be very costly if you quit during the early years of the policy. If you surrender such a policy during the first few years, you may get little or nothing back and much of your premium may have been used for company expenses. Find out what type of policy best fits your individual and family needs. Note that the cost of protection varies depending on when and how the policy stops, that is by death of the insured or by surrender of the policy. Compare costs of similar insurance policies using the index numbers shown on the back of this notice. COMPARISON SHOPPING SAVES MONEY! Try to determine how well the insurance company and agent will provide service to you in the future. READ THE BUYER'S GUIDE. It will help you to make a good purchase decision. READ THE REVERSE SIDE OF THIS NOTICE!

Agent: _____________________________ Prepared on: _____________________________

PLAN OF INSURANCE:

If this is term insurance, it is renewable to age ______ and convertible to age ______ .

AMOUNT OF INSURANCE:

ANNUAL PREMIUM:

COST INDEXES: When comparing the cost of two or more policies:

LOOK FOR POLICIES WITH LOW INDEX NUMBERS. Generally, they will cost less than policies with higher index numbers. COMPARE POLICIES OF SIMILAR PLANS AND FACE AMOUNT ONLY.

10th Year 20th Year

Net Payment Cost Index

(Cost of protection if

insured dies at end of:) ________ ________

Surrender Cost Index

(Cost of protection if

the policy is surrendered

at end of:) ________ ________

Dividends: This policy is: _____ guaranteed cost (does not pay dividends)

_____ participating (pays dividends)

REMEMBER TO COMPARE THE COST INDEXES ABOVE WITH THOSE WHICH WILL APPEAR IN YOUR POLICY SUMMARY. REQUEST AN EXPLANATION OF DIFFERENCES.

By the time the Policy is delivered, you will be given a complete Policy Summary, including cost data, which will be based on the benefits and premiums of the Policy as issued. The figures shown in this Preliminary Statement of Policy Cost are based on the assumption that a proposed Policy is issued as applied for. Adjustments will be necessary if the Policy is actually issued on some other basis. You may return any life insurance policy delivered in Maine within 10 days of delivery and obtain a full refund of all premium paid.

Notes

02-031 C.M.R. ch. 240, 031-240 app B

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