California insurance producers are required to follow Insurance Code sections covering disclosure, illustrations, replacement, and the "free look" period.
Disclosure (CIC Section 789.9)
For purposes of the following, "elder" means any person residing in California who is 65 years of age or older.
- An agent offering to sell a life insurance or annuity product to an elder must advise the elder or elder's agent in writing that selling or liquidating any financial asset to fund the purchase may have tax consequences, early withdrawal penalties, or other penalties, and that the elder or elder's agent may wish to get independent legal or financial advice before making the purchase.
(Note: This section does not apply to a credit life insurance product as defined in Section 779.2.)
An agent offering to sell a financial product to an elder on the basis of the product's treatment under the Medi-Cal program must not misrepresent the treatment of any asset under the Medi-Cal program, as it pertains to the determining the elder's eligibility for any program of public assistance.
Advisers selling financial products on the basis of the products' treatment under the Medi-Cal program must provide the written disclosure in Attachment III (see Unit 13) to the elder or the elder's agent.
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