ohio shopper s guide series Life Insurance Guide How to

ohio shopper’s guide series Life Insurance Guide: How to Get the Most Out of Your Life Insurance 1-800-686-1526 w w w. o h i o i n s u r a n c e . g o v Table of Contents Chapter 1: Life Insurance Basics What Is Life Insurance? Insurable Interests 2 2 3 4 4 4 4 4 5 5 6 6 6 7 8 8 10 14 14 15 16 17 17 18 18 19 20 22 22 22 23 24 25 26 26 29 32 Chapter 2: Applying For Life Insurance Age And Health Factors Determining Premiums Underwriting Physical Exams Application Questions Genetic Testing Guaranteed Issue Policies Clean Sheeting Naming A Beneficiary Changing Policies Chapter 3: Types Of Life Insurance Term Life Whole Life Endowment Insurance Universal Life Vanishing Premium Pitch Funeral Policies Mortgage Life Credit Life And Credit Disability Insurance Table of Contents Chapter 4: Benefits And Claims Life Insurance Riders Viatical Settlements Benefit Payments Chapter 5: Shopping For Life Insurance/Consumer Protections Purchasing Term Life Purchasing Whole Life Or Universal Life Using An Agent Life Illustrations Private Rating Firms OLHIGA Resolving Complaints And Disputes Chapter 6: Company List And Contact Information Chapter 7: Glossary Get more insurance information on our web site: www.ohioinsurance.gov Many good life products are available in today’s market. The various kinds of life insurance have been designed to fulfill needs that different people’s lives demand. Insuring your life to provide for your family is quite a simple concept, but trying to decide which product would best meet your needs can be confusing. This guide is intended as a basic foundation. It does not try to describe every type of life insurance, nor is one product endorsed over others. With this guide and the help of an agent, you should find it easier to identify a product that will protect the future of you and your family. For information about annuities, see The Ohio Shopper’s Guide to Annuity Contracts. Chapter 1 Life Insurance Basics What Is Life Insurance? Simply stated, life insurance is purchased to ensure your loved ones are financially secure when you die. Premiums are paid to the insurance company, and the company invests the money. When the insured dies, the company pays that person’s beneficiary. In reality, life insurance is not this simple. Over the years people have used life insurance as a basic building tool for an ever-increasing and ever-changing variety of financial plans. Note: It is illegal for an insurance agent to sell life insurance by calling it an investment. Why Buy Life Insurance? Life insurance provides the people who depend on you with money after you die. • It replaces your income with a non-taxable death benefit. • It reduces the financial burden on your family after you die. Depending on the policy you choose ❍ It helps put your children through school ❍ It pays the mortgage, car payments and other debts you leave behind ❍ It pays your funeral expenses ❍ It pays your estate taxes Life Insurance Basics Does My Life Insurance Policy Have Cash Value? When you buy life insurance, you normally buy insurance only, not stocks, bonds or securities. Cash value is created in some policies, but the interest on cash value is low. Moreover, dividends and other elements are neither guaranteed nor predictable. Some policies will allow you to elect to invest the cash value in various securities. How Is Life Insurance Different Than Other Types Of Insurance? See Chapter 3 for information about the various types of life insurance policies. Life insurance is fundamentally different from all other kinds of insurance. The main difference is that other kinds of insurance protect you against things that might happen. Examples include the following: • You buy auto insurance because your car might be stolen or involved in an accident, or • You buy health insurance because you might get sick. If you are lucky, those things will never happen, and the premiums you paid will be used by the insurance company to cover claims for other people who are also insured. Life insurance is different because it insures in the event of death, the one thing guaranteed to happen. It is not something we like to think about, but sooner or later we all die. Life insurance has its own language. Common English words often take on very different meanings when used to describe life insurance policies. Words highlighted in gold are defined in the glossary. See Chapter 7. 2 The other difference is that you usually insure your life to protect someone else. Due to tax consequences, it is generally not a good idea to be the beneficiary of your own life insurance policy. How Does Life Insurance Work? An insurance company collects money from a large group of people, called the insurance pool. Life insurance uses a large pool - new members join and old members die or cancel. The company promises each pool member that it will pay money when a member dies - if all required premiums are paid. What Happens If I Die Before Paying All My Premiums? Insurance companies are in the business of taking chances. The companies call it "assuming risk." When you purchase life insurance, the company hopes that you will live a long life so that by the time you die, you will have paid your full share into the insurance pool. However, the company also knows there is a chance you could pass away the day after you buy the policy. Therefore, the company accepts the risk that it may pay out a lot more than you paid in. Who Can Take Out A Policy On My Life? Only someone who has an “insurable interest” can purchase an insurance policy on your life. That means a stranger cannot buy a policy to insure your life. Those who have an insurable interest generally include members of your immediate family. In some circumstances your employer or business partner might also have an insurable interest. Insurable interest may also be proper for institutions or people who become your major creditors. How Does Life Insurance Work Must My Beneficiary Have An Insurable Interest? No. If you buy a policy on your own life, you become the owner of the policy. As the owner, you can name anyone as beneficiary. Insurance Tip: Consumer Services can help answer your questions about life insurance. Call 1-800-686-1526. 3 Chapter 2 Applying For Life Insurance How Do I Apply For Life Insurance? Life insurance policies begin with an application. Your answers will help the company decide whether it wants to insure you. When you complete the application, make sure to fill in every blank. Never leave blank spaces for anyone to fill in later. Your application becomes a part of your contract with the insurance company. Always tell the truth on your application! Omissions, half-truths and outright lies could invalidate your policy, leaving you or your beneficiary with nothing. Are My Age and Level of Health Considered When Buying Life Insurance? Yes. Your age and overall level of health are taken into consideration when buying life insurance. Although insurance companies are in the business of assuming risks, they try to make sure the odds are in their favor. In order to minimize risk, companies must determine what to charge each insured based on certain underwriting factors, including age and health. Applying For Life Insurance Companies use statistical averages - called mortality tables - to predict how long you will live. The availability and cost of life insurance are directly related to how long the mortality tables predict you will live. As you get older, the risk increases and so do life insurance costs. Life insurance can be inexpensive when you are very young, or it can be unaffordable or even unavailable when you are very old. Insurers also look at other things that can affect your life expectancy, including your health, family health history, health-related habits, and occupation. How Do Companies Determine How Much To Charge? The cost of insurance is a company's calculation of how much money it needs to collect from each member of the insurance pool. Life insurance cost is always based on the mortality tables and the statistical calculation of how much risk the company is accepting by insuring your life at any point in time. How Do Companies Evaluate Their Risk In Insuring Me? When you apply for life insurance, the company will ask you questions about your health and may require you to have a physical examination. The company will use this information to decide if and how it wants to insure you. This process is called underwriting. There are very few limits on the kinds of information life insurance underwriters can consider. Will I Need A Physical Examination? Life insurance companies often require you to have a physical exam. This will probably not be with your own doctor. The insurance company may arrange for you to go to a medical office or for a doctor or medical technician to come to your home. There should be no charge for the physical exam. 4 Do All Insurance Companies Require A Physical Exam? No. Not all companies require a physical exam for life insurance. However, although there may be no physical, you will probably have to answer a few, broad health questions on your application. Also, the insurance may be more expensive than if the company required a physical. Higher face amounts usually require physical exams. What Kinds Of Questions Will The Company Ask When I Apply For Life Insurance? Most likely, your application for insurance will ask questions similar to the samples below. Do you use tobacco products? Insurance companies definitely believe that smoking can shorten your life. Most companies charge higher rates for smokers. Do you have heart disease, cancer, diabetes, AIDS, etc.? Depending on the seriousness of your health problem, a company may issue life insurance to you at its regular rates, or it may charge you a higher rate than usual. If your health problem is very serious, some companies will simply turn you down. Do you have a dangerous job? The company may turn you down or charge a higher rate if it believes your line of work is unusually dangerous. Some examples: test pilot, race car driver, coal miner. Is there a family history of fatal disease? The company is not limited to knowing about just your own health record. It can look at your family history for diseases that appear to run in the family. Examples: Huntington’s Disease, heart disease, stroke, Sickle Cell Anemia. These are examples only. Your application may ask different and more detailed questions. Insurers’ Questions What Other Questions Might Be Asked On The Application Form? A company may ask certain questions to evaluate high-risk insureds. The following are examples of the types of questions you may be asked: 1) In the past seven years have you been a. Cited for drunk driving? b. Diagnosed and/or treated by a doctor for: heart disease or disorder, cancer, stroke, diabetes, chronic liver disorder, chronic lung disorder, AIDS or AIDS-Related Complex? c. Advised by a doctor to discontinue or reduce use of alcohol? 2) Are you currently disabled or did you retire because of any injury or illness? Although answering "Yes" to any of these questions could mean you may not get the policy, it is very important to answer all questions truthfully. If not, the company can deny paying a claim. Are Insurance Companies Permitted To Use Genetic Testing For Life Insurance Applications? Yes. Life insurance companies believe they can learn a lot about you by looking at your blood. The company obviously wants to know about any diseases you have now, but your blood can also tell them about diseases that you might get in the future. Therefore, some companies have begun looking at your chromosomes for evidence that you have inherited genes that have been linked to various diseases. 5 Important! Ohio does not allow genetic testing for health insurance. However, insurance companies can use genetic information when you apply for life insurance. I Was Treated For Cancer Five Years Ago. The Doctors Have Declared That I Am Completely Cured. Can A Life Insurance Company Turn Me Down? Yes. Each insurance company sets its own rules. Some may be willing to insure you, others may not. Some Life Insurance Ads Claim 'You Can Not Be Turned Down.' What Is The Catch? Such ads are for "guaranteed issue" policies that ask no health history questions. The company knows it is taking a risk because people with bad health could buy their policies. The company balances this risk by charging higher premiums or by limiting the amount of insurance you can buy. In some cases, the premiums can be almost as much as the insurance. After a few years you could pay more to the insurance company than it will have to pay to your beneficiary. Such policies may offer only the return of your premiums if you die within the first couple of years after you buy the policy. My Insurance Agent Told Me Not To Answer All The Questions On My Application. Should I Trust This Advice? Questions You May Have Insurance agents earn a commission when they make a sale. If the company rejects your application, the agent gets no commission. A dishonest agent may tell you not to bother with all the health questions and to leave blank spaces on the application. Later, you look like the perfect applicant because the agent wrote answers to key health questions in a way to get you approved. This scam is called "clean sheeting." You may get the policy; but if the company decides to investigate and discovers the truth, you could lose the policy. If the truth is discovered after you have died, your beneficiaries could have a hard time collecting. Never sign a blank application! Most insurance agents are very professional and honest. However, if you believe your agent has acted unethically, please call the Ohio Department of Insurance at 1-800-686-1526. How Do I Make My First Premium Payment? If you are buying through an insurance agent, the agent will ask you for an initial payment, which may be part or all of your first year's premium. Pay by check, but never make your check payable to the agent. Your check should be made out to the insurance company with a note on the check referencing the policy. DO NOT pay in cash. How Do I Name A Beneficiary? The policy owner has the right to name one or more beneficiaries. If you are applying as the policy owner, you can name any person or organization as a beneficiary. You can also specify the amount each beneficiary is to receive. 6 What Is A Contingent Beneficiary? A contingent beneficiary receives benefits only if the primary beneficiary has died. What Is The Difference Between A Revocable Beneficiary And Irrevocable Beneficiary? A revocable beneficiary can be changed at any time. An irrevocable beneficiary has legal rights in your policy, and you need the beneficiary's consent to make any changes, to surrender the policy, or take out a policy loan. For these reasons, it is not a good idea to name a child as an irrevocable beneficiary. If I Change Life Insurance Policies, Will My Taxes Be Affected? The value in your insurance policy is not taxable when it is directly transferred into a new policy. However, if you surrender the policy you might owe taxes. What Should I Do Before Changing Policies? Compare the rights and benefits of each policy carefully before you switch. Be sure you are not giving up benefits that are important to you. If I Already Have Life Insurance, Am I Automatically Eligible For Other Policies? Not necessarily. If your health has deteriorated since you bought the old policy, you may have become uninsurable. Your old policy can not be cancelled because of your health problems, but you may not be able to get a new policy. If you change policies, you may be subject to a new two-year contestability period. Will I Lose Money Even If I Switch Between Cash Value Policies? When you replace a policy that you have owned for several years, you could lose money! Insurance agents sometimes suggest that you use the cash value from an old policy to make a large first payment toward a new policy. This could be a step backwards. In the first few years you have a policy, the company uses most of your excess payments for sales commissions and administrative expenses. When you switch policies in these first few years, your cash value can disappear and much of your new premium may again be eaten up by commissions and expenses. Surrender charges may also be applied. More Questions What Is A Replacement Notice? Ohio law requires insurance agents to complete a replacement notice any time they replace a life policy or take actions that will affect its cash value. Read the notice carefully. The agent must get your signature on the notice. A copy of the notice will be sent to the company that issued your old policy. That company then has a chance to persuade you not to switch (this is called conservation). Insurance Tip: Do not cancel your old policy until you have the new policy and you are satisfied that it is what you want. A lot could be riding on your decision. If an agent has recommended switching, ask the agent to carefully explain all the reasons and put them in writing. Before you sign with a new agent or company, contact the agent or company that sold you the old policy. Explain the switch that you are considering and listen to what the agent or company representative has to say. Make sure you understand what you are buying and what you are giving up. 7 Chapter 3 Types Of Life Insurance What Is Term Life Insurance? Term life is the simplest type of life insurance. Term gets its name from the limited length or "term" of the contract. Term insurance usually has no cash value, generally lasts for 1, 5, 10, 15, or 20 years, or to some specified age such as age 65 or age 100. If you die during the term, the insurance company will pay the death benefit if all premium obligations are met. If you do not die during the term, no benefits will be paid. You may be able to renew the contract at the end of the term, or you will need to buy another policy. Are There Different Types Of Term Life Insurance? There are three major types of term insurance. They are • Level - Provides a death benefit that stays the same over the period. Example: A five-year level term policy with $10,000 in coverage means the company will pay $10,000 if you die any time during the 5 years the policy is in effect. Premiums normally stay the same (level) during the term. Types Of Life Insurance • Decreasing - Provides a death benefit that decreases over the term in a specified manner. Example: The benefit during the first year of a five-year decreasing term policy may be $10,000 which then decreases by $2,000 each subsequent year. At the end of the fifth year, the face value is zero and coverage expires. Premiums for decreasing term usually remain level throughout the term. • Increasing - Provides a death benefit that increases over the term in a specified manner. Example: The benefit for a five-year increasing term policy may have a face amount that starts at $10,000 and then increases 5% every policy anniversary date. The coverage may also be tied to increases in the cost of living as measured by a standard index. Premiums usually increase with the coverage in this type of policy. Are Term Policies Renewable? Most term policies include a guarantee that you can renew the policy for a specific number of years, without having to again prove insurability (good health). For example, a 10-year renewable term policy covers you for 10 years at a level premium. After the 10-year term, the company will send you a renewal for the next 10 years. Although your premium will again be level for the new 10-year period, the new premium will be higher because you are older than when you first bought the policy. Note: The policy's renewal provision will normally specify that your right to renew is limited by age or by a maximum number of renewals. Renewable term usually has a higher premium than that for a similar nonrenewable policy. 8 Are Term Policies Convertible? Term policies are generally convertible. This means they guarantee the right to switch or "convert" from term to one of the company's whole life policies. Conversion rights usually guarantee that you will be accepted for the whole life policy regardless of your health when you convert. However, the whole life policy you switch to could be much more expensive. Insurance Tip: You may see the phrase “Without proof of insurability” in a renewable or convertible term policy. It means you will not have to prove you are healthy in order to renew the term policy or to convert it to whole life. What Is The Premium Structure For Term Life Insurance? There are generally four types of payment patterns associated with term insurance. • Level: The dollar amount of your premium remains the same throughout the term. • Increasing: The premium increases by a set dollar amount after a set number of years, as specified in the contract. • Level/increasing: The premium is level for a specific period, then increases by a set amount annually. • Indeterminate: Two premium rates are established - a guaranteed maximum, and a lower rate you actually pay. The lower premium is level for a specific period of time. After that period, the company establishes a new rate that may be higher or lower than the initial premium. The premium you pay can never be more than the guaranteed maximum rate. Why Is Term Life Often Called Temporary Insurance? Insurance agents sometimes refer to term insurance as "temporary" because the term policy lasts only for a specific period. In reality, it is probably no more "temporary" than your auto or homeowner insurance. Just like term, those types of policies provide coverage for a specific period of time and must be renewed when that period ends. Term Policies Why Are Some Insurance Agents Reluctant To Sell Term Insurance? An agent may believe term is risky, but only because you could have a hard time buying a policy in the future if your health deteriorates or you cannot afford the higher premiums. Commissions could also be a reason for an agent who discourages term. The agent often makes less money for selling term than for other forms of life insurance. An Insurance Agent Has Suggested I Switch Term Companies Every Couple Of Years To Take Advantage Of The Company's Promotional Rates In The First Couple Of Years. Is There Anything Wrong With Doing That? No, but there is always a risk when you switch polices. For one, you would be subject to a new contestability period each time you change policies. If you die during that two-year period, the insurance company can (and probably will) investigate the statements you made on your application. If you gave inaccurate or incomplete answers, the company may (and probably will) refuse to pay the death benefit. 9 What Is Whole Life Insurance? Whole life insurance gives you lifetime coverage at a premium rate that does not increase with your age after you buy it. Level premium payments build a reserve in your policy that is used to insure you as you age. Insurance companies call this reserve the "cash value." Are There Different Types Of Whole Life Insurance? Yes. The more common types are described below. Joint Whole Life — Provides basic whole life benefits, but two lives are insured under the same policy. When one person dies, the benefit is paid to the survivor, who then has an option to purchase an individual whole life policy without having to prove insurability. Last Survivor Whole Life — A type of joint whole life, designed mainly for married couples. Federal estate taxes are not collected on property left to a spouse, but when the surviving spouse dies, estate taxes may be owed and can be very high. A last survivor policy pays a benefit only after both spouses have died, providing funds for estate taxes. Universal Life — Allows you to choose your policy's face amount and premium and to change these factors while the policy is in effect. Your choices must fall within the company's specified minimum and maximum amounts. These guidelines are set to meet life insurance regulations and maintain healthy relationships between premium, face amount, benefit and cash value. Whole Life Adjustable Life — Allows you to vary your coverage as your insurance needs change. You normally choose the face amount you need and the premium you want to pay, and the company calculates a plan that provides coverage for your request. The result could be any plan from a term life policy with a short period to a limited-payment whole life policy. You can also choose the type of plan and face value you want, leaving it to the company to calculate the premium rate needed. Indeterminate Premium Life — Specifies two premium rates - a guaranteed maximum and a lower rate you actually pay. The lower premium is level for a set period of time. Then the company establishes a new rate that may be higher or lower than the initial premium. Your premium can never be more than the guaranteed maximum. Interest Sensitive Whole Life — Similar to indeterminate premium life, but taken a step further. Cash value can increase beyond the stated guarantee if economic conditions warrant. You decide whether you want favorable changes to result in lower premiums or higher cash value. Also called current assumption whole life. 10 Variable Life — A security that has benefits and features similar to traditional whole life, but face amount and cash value depend on investment performance of a special fund. Reserves are placed in designated investment accounts that are separate from the company's general account and values of these separate accounts rise or fall based on returns from the separate investments. Face amounts and cash values depend on how investments perform. Most policies guarantee the face amount will not fall below a set minimum, but minimum cash value is rarely guaranteed. Variable Universal Life — Combines rate and benefit flexibility of universal life with investment and risk factors of variable life. Like variable life, this product is considered a security. It can be sold only by agents who have passed the National Association of Securities Dealers (NASD) exam. What Is Cash Value? Cash value is the amount of money you will receive as a refund if you cancel coverage and surrender the policy to the insurer, minus any penalties or interest that have accrued. Cash value is a feature of whole life insurance. Can I Borrow Against The Cash Value Of My Whole Life Insurance Policy? Once a policy builds cash value you can use it to get a policy loan. The loan can be for any amount up to a percentage of the policy's cash value. The loan will accrue interest. If the loan plus interest amount exceeds the cash value, the policy will expire with no value. How Is The Cash Value Determined? When you are young, you pay more in whole life premiums than it takes to insure you. The insurance company uses the reserve to insure you later in life when the premium you pay no longer provides enough insurance to cover you. This is necessary because your premium stays level as long as you own the policy. Reserves relate to the policy's cash value. Cash value and reserves grow during the life of the policy and are eventually equal to the face amount - usually when you have reached age 100. The actual cash value amount depends on many factors: • The policy's face amount, • How long you have owned the policy, • Length of the premium payment period, and • Whether you have any outstanding policy loans. Cash Value Are There Advantages To A Policy Loan? A policy loan has some advantages over a commercial loan. Usually the loan is easier to get and there is no schedule for repayment. The insurance company will not check your credit; it will grant the loan based only on your policy's cash value. You can repay a policy loan at any time, in part or in full. Of course, if you die before the loan is repaid, the amount of the unpaid loan (plus interest) is subtracted from the death benefit. 11 Are There Other Advantages To Whole Life Insurance Policies? Some whole life policies can return money to you in the form of dividends. These are called participating policies. If the company earns a surplus because of profitable operations, owners of participating policies could share in the surplus. A life insurance dividend is actually a refund of part of your premium. When a company collects more money in premiums than it needs to pay death claims and maintain the insurance pool for future claims, the company may pay dividends at the end of that year. Since earning such a surplus depends on many variables, dividends are never guaranteed. What Happens When A Dividend Is Paid? You generally will have five choices: • Take the dividend in cash • Buy additional insurance at net cost (this option is called a "paid up addition") • Let it accumulate with your cash value • Reduce your premiums • Purchase 1-year term insurance Are There Different Ways Of Paying Premiums For Whole Life Insurance? Yes, there are many different ways to pay premiums for whole life insurance, including those listed below. • Continuous: Premiums are payable throughout the life of the person insured. Paying Premiums • Limited Payment: Payments are limited to a specified number of years, or an age after which premiums are no longer due. The annual premium amount is larger for limited payment policies than for continuous premium policies, but these policies build cash value more quickly. • Single Premium: A type of limited payment policy that requires only one payment and yields instant cash value. • Modified: For an initial specified period of time premium payments are lower, then they increase to a level amount for the rest of the life of the policy. The policy's face amount does not change, so you can buy a larger policy than you might be able to afford otherwise. Cash value grows more slowly than with traditional whole life policies. • Graded: A type of modified premium policy that has three or more steps of payment amounts. I Understand My Policy Would Be 'Fully Paid Up' At Age 65. What Does That Mean? "Fully paid up" means that you have made enough premium payments to cover the cost of insurance for the rest of your life. I Had A Policy That Was Paid Up; Now I'm Told I Don't. What Can I Do? You may have signed papers that permitted the cash value of your paid up policy to be used to pay for another, larger policy. If you are not sure or can not remember, call the insurance company. If you are still not satisfied after talking to the company, contact Consumer Services at the Ohio Department of Insurance: 1-800-686-1526. 12 What Happens To The Cash Value After The Policy Is Fully Paid Up? The company plans to use the cash value to pay premiums until you die. If you take cash value out, there may not be enough to pay premiums. The company could require you to resume paying premiums, or reduce the amount of the death benefit to an amount that the remaining cash value will support. An Insurance Agent Has Suggested That I Buy Term Instead Of Whole Life. Does It Make Sense To Buy Term And Invest The Difference? "Buy term and invest the difference" has been a popular sales slogan for term life. The pitch compares term, the least expensive form of life insurance, with other kinds of life insurance. Here is an example for a $100,000 death benefit at age 35. Annual premium Whole life: Annual renewable term: Difference: $1,800 $250 $1,550 If you buy whole life, the difference is used to keep your premiums lower than the actual cost of insurance as you get older. If you buy term life, you keep the difference. • As you get older your term premiums will increase to keep up with the cost of insurance. • If you invested the difference, you could use your investment to pay the higher cost of insurance, but if you spent the difference you will have to find another way to pay higher premiums. • If your health deteriorates you may not be able to buy a new policy. Endowment Insurance For 10 Years I Paid The Insurance Company $1,000 Every Year. That's $10,000! But When I Cashed In The Policy They Sent Me Only $5,800. Where Did The Rest Of My Money Go? It paid for insurance! You were entitled to only the cash surrender value - the amount you had paid to "pre-fund" insurance in your old age. The amount would have been even less if you had borrowed money that had not yet been repaid. How Much Cash Value Is In My Policy? Read your policy. It has a table of cash values that should provide the answer. If you are still not sure of the cash value amount, call your agent. What Happens To The Cash Value In My Whole Life Policy When I Die? When you die, the insurance company will pay the death benefit. No matter how much cash value you may have had in the policy the moment before you died, your beneficiaries can collect no more than the stated death benefit. Any loans you have not repaid (plus interest) will be subtracted from the death benefit. Therefore, your beneficiary could wind up with less than the face amount of the policy. Some whole life policies pay both the death benefit and the cash value when you die. This is the exception, not the rule! 13 What Is Endowment Insurance? Endowment insurance is not technically whole life insurance, but is included here because it builds cash value. The company pays the policy's face amount whether or not you die during the term. Endowment insurance policies usually have level premiums. How Does Endowment Insurance Work? Your endowment policy names a "maturity date." This date occurs either at the end of a specified period of time or when you attain a specified age. If you are still living on the maturity date, the insurance company will pay you the face amount. If you die prior to the maturity date, the face amount is paid to your beneficiary when you die. As owner, you will designate both the person to receive the benefit on the maturity date (normally yourself) and the person to receive the benefit if you die during the term. What Is Universal Life Insurance? Universal life insurance describes a specific type of flexible life insurance that provides for coverage similar to term life insurance along with the benefit of tax deferred savings. The policy owner may change the death benefit from time to time (with satisfactory evidence of insurability for benefit increases) and vary the amount or timing of premium payments. Premiums are credited to a policy account and interest is credited at rates that vary. Universal Life Are There Certain Advantages To Universal Life Coverage? Universal life policies have the potential for cash value to earn more than the minimum (guaranteed) interest rate. Also, premium amounts and death benefits are flexible. You may be able to change the amount of your premium payments and/or your death benefit after you buy the policy. Decreasing your payments might be allowed only if the policy has enough cash value to cover the current cost of insurance. You can increase your coverage by paying larger premiums, but you may be required to answer health questions or have a physical to increase the benefit. What Are The Cash Value Options For Universal Life Insurance? It is not guaranteed, but it is possible the cash value in a universal life policy could grow faster than is needed to pay the cost of insurance. You can generally choose how that money is used. Your options include the following: • Allowing your policy to accumulate interest ❏ Taxes won't be due until you take it in cash ❏ Future premiums may be reduced ❏ Your beneficiary is entitled to only the death benefit in the event of your death • Taking cash out of your policy ❏ The funds could be treated as taxable income and lower the policy's cash value What Are The Death Benefit Choices For Universal Life? Death benefit choices include the two options shown below. Option A: Level death benefit is equal to the policy's face amount. Option B: Increasing death benefit is equal to the policy's face amount plus the policy's account value. Premiums will be higher for an Option B plan. 14 I Was Told That I Eventually Would Not Have To Pay Universal Life Insurance Premiums. Is This Too Good To Be True? Some insurance companies and agents have led customers to believe their universal life premiums could disappear or vanish. Do not believe it; you will not get something for nothing! Consumer complaint example: "We are writing out of concern and frustration about the company that sold us our life insurance policy. When we bought this policy eight years ago, we put $20,000 into our first premium payment. The agent explained we would have to pay premiums for only another five years, and after that the company's separate account earnings would make the cash value grow fast enough to cover our premium payments. He called this the vanishing premium and showed us a computer printout with enough cash value from earned interest to cover premium payments for the rest of our lives. “The five years have come and gone. Every year we get a statement that shows a balance due for annual premiums, and now it looks like we will have to pay premiums for the rest of our lives. The premiums have not vanished, but our initial $20,000 investment sure has.” The Ohio Department of Insurance has received many complaints like the one above. Agents generally use illustrations (see page 24) to explain universal life. However, a few have used a sales pitch that suggested premiums could vanish. This is considered an abuse. Regulations took affect in October 1997 to make this vanishing pitch illegal. What Is The Vanishing Premium Sales Pitch? The agent or company representative starts by telling you to put a large, lump sum into a universal life policy. Then you are told that the policy has the potential for making money, much like an investment. (But do not forget, it is illegal to sell life insurance by calling it an investment.) The company may pay interest, if it has a good year. If the company does as well as the agent says it can, the percentage of interest could be very high. So if you started out by pre-paying $20,000 or $30,000 and then leave the interest and dividends in your policy to further build up its cash value, you could have enough cash value in the policy to pay the premiums after only a few years. While it is possible things could work this way, it is very likely that they will not. The bottom line is that the vanishing pitch depends on rosy numbers that are “not guaranteed.” Therefore, no matter what numbers the insurance agent may show you, the company will not stand behind any value that is "not guaranteed." Premiums never vanish, disappear, or go away. They must be paid every year, either from the accumulated values of your policy or from your pocket. Vanishing Premiums Is It Reasonable To Count On Dividends Or Other Company Profits To Grow My Policy? Do not count on dividends or other potential profits your life insurance policy could earn. These potential sources of profit may be referred to as "non-guaranteed elements” in your life policy. 15 Is It Possible To Have Enough Cash Value To Cover My Premiums? While it is possible, it is not likely. Having enough cash value in your policy to pay the cost of insurance only happens if a lot of things go in your favor: • If the company has very good years, • If the company pays high dividends and • If you do not withdraw cash value. Remember: The interest rates and dividends are "not guaranteed." That means the company might pay less than what's shown on the illustration...or nothing at all. Do I Need A Funeral Policy? Funeral policies can make sense. It makes good sense to want enough insurance to cover your funeral expenses. It makes less sense when the policy costs more than it will pay out. Ask questions and do the math before you purchase funeral insurance. When you are older and purchasing life insurance, it is possible to live long enough that you will pay more in premiums than the face value of the policy, perhaps in as little as 8-10 years. However, the reverse is also true. You could pay one premium and die, and the company would be responsible to pay the full face amount to your beneficiary. Insurance Tip: The typical "funeral policy" is a whole life policy with a small death benefit - usually under $5,000. Can The Funeral Director Who Sells Me My Funeral Policy Also Be Named The Beneficiary? Irrevocable Assignment Insurance agents generally cannot be beneficiaries on policies they sell to you. That is considered a conflict of interest. However, there is an exception for funeral directors. Ohio law now permits funeral directors to sell you insurance and name themselves as beneficiary on the policy. Some funeral directors now package life insurance plans together with funeral contracts. Because the funeral director is the beneficiary, when you die the insurance company pays the death benefit directly to the funeral home. Is There An Alternative To Funeral Insurance? If your main concern is paying funeral expenses, the traditional alternative is a pre-need contract with a funeral director. Here is how it works. • The funeral director contracts to provide a funeral for a specified amount. • Your payments go into an escrow fund. • The money remains yours. • Unlike life insurance, you can withdraw your money from the pre-need escrow fund. • Ohio law regulates pre-need contracts. What Is An Irrevocable Assignment? The funeral director might ask you to sign a contract that assigns ownership of the policy to the funeral director. That means the funeral director owns all rights to the policy, including the right to name the beneficiary. This is called irrevocable assignment. One Ohio couple did not discover what this meant until two years after they had paid an up-front premium of $14,000 for two funerals. Here is part of the letter they sent the Ohio Department of Insurance: "We asked for our money back. That's when we discovered that we had signed a form that assigned all ownership of the policy to the funeral director. We were told the assignment was 'irrevocable' and that the funeral director now owns all rights to the insurance policy." 16 Read and understand your policy! Most insurance disputes occur because consumers have not read and understood the policy. Too many times a consumer has false impressions about what the policy will and won't cover. Read the entire policy before buying. Ask the agent to explain everything you do not understand. Also, most policies include a “free look” period. If you still have questions, contact Consumer Services at the Ohio Department of Insurance and ask to speak with a life analyst. Call 1-800-686-1526. What Is Mortgage Life Insurance? If you own a house and have a mortgage, chances are you have heard the pitch for mortgage life insurance. It often comes in an envelope from your lender, and may include a letter from your lender recommending that you buy a policy. However, the insurance itself is sold by insurance companies. Although called mortgage insurance, it is really decreasing term life insurance that will pay off your mortgage if you die. How Are Premium Payments Structured? Mortgage life is a decreasing term policy. The policy begins with a death benefit that is equal to your current mortgage balance. The death benefit decreases at the same rate as your mortgage balance. The premium payments never change but may stop prior to the loan payment. Your lender may agree to add the premium payments to your monthly mortgage payment. Is Mortgage Life Insurance That Same Thing As Private Mortgage Insurance (PMI)? No. Mortgage life insurance is often confused with Private Mortgage Insurance (PMI), but they have nothing to do with each other! You buy mortgage life voluntarily to protect your survivors from having to pay the mortgage. Mortgage lenders require you to buy PMI to protect them (the lenders) against the possibility that you will default on the mortgage. Insurance Tip: Ask insurance agents to quote their best price for a decreasing term policy in the same amount, period, and interest rate before purchasing from a solicitation sent by your mortgage company. Credit Life Insurance What Is Credit Life Insurance And Credit Disability Insurance? When financing some types of large items - car, furniture, stereo set - there is a good chance you will be offered credit life and credit disability insurance. Credit life promises to pay your debt if you die. Credit disability will make your payments if you become disabled and unable to work. Credit life is a decreasing term policy. The insurance premiums are usually added into the loan contract.This type of insurance is always optional, and it can be quite expensive. Your lender cannot require you to buy credit life or credit disability insurance. Although they may have some similar features, credit life and credit disability insurance are not mortgage life insurance. 17 Chapter 4 Benefits And Claims What Is A Life Insurance Rider? A "rider" is something that is added to the basic policy. Riders can be used to either add benefits to the policy or limit benefits already in the policy. Common riders are described below. Accidental death: Double indemnity is another name for this rider. It means that the benefits paid by your policy will be two times the face amount of the policy if you die in an accident. • About 20% of all policyholders die in accidents. • The cost for an accidental death rider is generally inexpensive. • Some critics point out that how you die has nothing to do with how much money your survivors will need. Waiver of premium: This rider lets you stop paying premiums whenever you become disabled and can not work. • Make sure you understand how the rider defines "disabled." For example, the definition could be very restrictive and require you to be so disabled that you can not do any kind of work. • A disability policy can also protect you from financial hardship due to a disability. Depending on the type of policy you buy, it could provide money to pay for all of your living expenses, not just your life insurance premium. Benefits and Claims Mortgage protection: This rider essentially attaches a mortgage life policy to your main policy. Read more about mortgage life on page 17. Other insured: You can add life benefits for your spouse or children. They might have different coverage amounts and might have to pass medical underwriting. Guaranteed insurability: This rider would typically be added to a whole life or universal life policy. • It gives you the right to buy a new policy or increase the limit on your existing policy without having to pass another medical exam. • The rider will probably specify how much you can add and when you can do it. • The guarantee might not continue after you reach age 45 or 50. Accelerated death benefit: This lets you use some part of your death benefit when you have a terminal illness. Read more about this benefit on page 19. Some policies will add this rider without causing your premium to increase. Insurance Tip: If your agent automatically includes one or more riders when calculating your premium, ask the agent to price each rider separately. You can then decide whether you believe the added benefit any rider provides is worth the extra cost. 18 Is It Possible To Collect On My Life Insurance Before I Die? Some life insurance policies permit you to "accelerate" the death benefit. This provision makes it possible to collect on your own life insurance before you die. Some companies call this the "living benefit" provision. • This provision may be built into the policy or offered as a rider. • It is intended to let you use death benefits to pay hospital or medical bills connected • with terminal illness. • Generally, it requires that you have a terminal illness, backed up by a doctor's predic tion that you will die within a set period of time. (The amount of time will be specified in the policy). The policy may limit the dollar amount you can take out. Be careful! If you accelerate and use the death benefit, there will be less left in the policy for your family or other beneficiaries when you die. What Are Viatical Settlements? A viatical settlement is an agreement to sell the ownership of your life insurance policy to another, unrelated person, who becomes both the owner and beneficiary of the policy. Remember, it is illegal for a stranger to take out an insurance policy on your life. The stranger has no insurable interest and could have an unhealthy desire to see you die sooner than nature intends! However, a life insurance policy is like anything else. If you own it, you can sell it, even to a perfect stranger who has no conceivable insurable interest. That person becomes the policy owner and can then name himself as the beneficiary. Note: Ohio law gives authority to the Ohio Department of Insurance to license companies and individuals who deal in viatical settlements. Viaticals What Are Viatical Buyers And Sellers? Buying and selling life insurance policies is the specialty of businesses that call themselves viatical settlement firms. The viatical firm buys insurance policies from people with terminal illnesses and sells them to investors. Viatical example: A doctor confirms Joe has only a year to live. Joe needs cash; he has used up his savings and the bills are piling up. He owns a $100,000 life insurance policy. A viatical firm offers Joe $50,000 for the rights to the policy plus a contract promising Joe that his identity will not be revealed. Joe signs over all rights to the policy and collects $50,000, which he can use to pay medical bills or whatever he wants with it. The viatical firm now owns the policy but not for long. It puts the policy on the market with a promise to investors of a fast and impressive return on their money. Potential investors are shown medical records to support the claim that Joe has less than one year to live. An investor pays $80,000 for the policy, and the firm makes a $30,000 profit. The investor is now the owner of the policy and responsible for paying the premiums. The investor also becomes the beneficiary. Therefore, when Joe dies, the investor collects the full $100,000 death benefit, making $20,000 on the original investment. 19 If I Do Not Sell My Policy, What Happens After I Die? When an insured person dies, the beneficiary must file a claim to collect the death benefit. The company has 60 days to pay the claim or notify the beneficiary of any problem with it. The beneficiary should ask the agent or company for a claim form. They will need • The name of the insured • A policy number, and • A certified copy of the death certificate. Special circumstances may arise if the beneficiary is a minor. How Will The Death Benefit Be Paid? The beneficiary may have a choice of ways to receive a death benefit. Settlement options may include the following: • A lump sum payment (the company sends a check for the full amount.), • An installment payment with interest, • A checking account (the company sets up a money market checking account in the beneficiary’s name; the beneficiary receives a check book and can withdraw money when wanted.), and • The company could hold the benefit and pay interest. Will The Death Benefits Be Taxed? You generally do not have to pay income tax on death benefits. What Happens If There Is A Conflict Between Beneficiaries? Death Benefits If there are conflicting claims (such as two people claiming to be the beneficiary) the company may turn the money over to a court. The court will hold the money until it decides who deserves it. This process is called interpleader. Can The Company Refuse To Pay On My Policy? Insurance companies can refuse to pay death benefits, under certain limited circumstances, if you die within the first two years of a policy. The company's reasons could include the following: • The insured (now dead) committed fraud when applying for the policy, • The insured did not disclose a material fact on the application, and • The insured committed suicide. Moreover, if a beneficiary intentionally killed the insured person, the company can refuse to pay a death benefit no matter how long the policy has been in effect. This is true even if a court has not convicted the beneficiary of the murder. 20 A Family Member Has Died. We Are Sure That He Had Life Insurance, But We Can Not Find Any Policy Information. Can The Ohio Department Of Insurance Check To See What Policies Exist? This problem is not unusual and there are no easy solutions. The Ohio Department of Insurance does not have a data base of policies issued to Ohio residents. The tips shown below may help you. • Look through the person’s checkbook to see if there have been any checks written out to a specific insurance carrier. If so, the Ohio Department of Insurance can provide you with the name and address of that carrier. • If the house and car were insured, start with the local agents who sold those policies. • If the person worked outside the home, check with the employer for group life insurance or if there was a payroll deduction for an individual policy. • If the person was a member of a fraternal organization, check with that organization to see if membership provided any coverage. Private firms specialize in finding lost life insurance for a fee; the Department of Insurance cannot endorse or recommend such companies. While We Were Married, My Husband Bought A $100,000 Policy And Named Me As Beneficiary. I Paid The Premiums. He Died One Month After Our Divorce. Do I Get The Death Benefit? Not if the policy was written after May 1, 1990. Ohio law treats ex-spouse beneficiaries as if they are dead or had pre-deceased the insured person. Therefore, you are not entitled to any of the death benefit from that policy. There are a few exceptions. You could collect as a beneficiary of your late ex-spouse if • The divorce decree specifies that you are to be a beneficiary, or • Your late ex-husband had specified you as a beneficiary after the divorce was final. Divorce does not affect children's beneficiary status. Death Benefits 21 Chapter 5 Shopping For Life Insurance/Consumer Protections What Questions Should I Ask When Shopping For Term Insurance? Because it is the simplest form of life insurance, term can be the easiest to shop and compare. But you should still ask yourself and the agent a lot of questions. Here are some suggestions. • Decide how much you need (the amount of the death benefit) ❍ Level benefit ❍ Decreasing benefit • Decide how long you want the insurance to cover you (the length of the term) ❍ 1, 5, 10, 15, or 20 years or to age 100 ❍ Level or increasing premium • Compare premiums ❍ See pages 29-31 for a list of companies • Find out if policy fees are built into the premiums • Ask if the policy is renewable • Find out if it is convertible to whole life, regardless of your health at that time • Ask if participating policies are available (potential for dividends) Where Do I Purchase Term Life Insurance? Most life insurance agents will sell you a term policy, although some prefer to offer only whole life or some other form of life insurance. Some companies market term insurance through the mail without agents. Consumer Protections Term quotations and sales are also available over the Internet. Some firms quote over 100 different policies and even take your application online. What Questions Should I Ask Before Buying A Whole Life or Universal Life Policy? The more complicated the policy gets, the more you will find yourself relying on an agent to explain it. It is often difficult to compare whole life or universal policies because they are complex. Here are some basic questions to ask about a whole life or universal life policy to guide you through the process: How much will I pay each year for each part of the policy? • Cost of insurance or "mortality charge" • Sales commissions • Administrative fees • Future insurance (cash value) • TAMRA law Are there penalties for early surrender? • How much? • When do they stop? Do I understand the illustration (see page 24)? • What's guaranteed - and what is not? • Interest rates: declared monthly or annually; simple or compounded? • Does it still make sense after the agent has left? • Did it sound too good to be true? How long do I plan to keep it? • Decades? • Only a few years (consider term!)? 22 Insurance Tip: Have at least one other person listen to the sales pitch, and compare notes later. Will I Benefit By Buying Life Insurance Through An Agent? Life insurance can be very complicated. A good agent can guide you by explaining the options and identifying those that best match your personal needs. However, a dishonest agent can confuse you with a pitch designed for high sales commission with little regard for the impact on you. While most agents are very professional and honest, it is good to report any suspicious activity or incident to the Department of Insurance. Call 1-800-686-1526. Although agents represent insurance companies, a good agent can be your best ally and advocate if you have a problem with the company. Do Agents Have To Be Trained and Licensed? Ohio requires all insurance agents to be licensed. More than 64,000 agents are licensed to sell life insurance in Ohio. The state's minimum standards for a life insurance agent includes the following: • Successful completion of at least 40 hours on the fundamentals of life and health insurance, • Passing grade on the state licensing exam, • Payment of an annual licensing fee, and • Completing at least 30 hours of continuing education classes every two years. Many agents have extensive education beyond the bare minimum required for a license. These agents may use initials after their names to let you know you are dealing with a well-trained professional. Some examples: CLU: Chartered Life Underwriter ChFC: Chartered Financial Consultant FLMI: Fellow of Life Management Institute CFP: Certified Financial Planner Remember: The agent represents and speaks for the insurance company. The agent may be your personal friend, and you probably think of that person as your agent. Regardless, when selling you insurance, the agent is working for the company. Consumer Protections What Is The Difference Between Captive And Independent Agents? All insurance agents represent insurance companies, and before an agent can sell insurance for a particular company, the company must appoint the agent as its legal representative. A captive agent represents one company only, much like an employee of the company. This agent might show you different kinds of policies, but each will be with that same company. An independent agent may represent numerous companies and sell you a policy from any of those companies. What Guidelines Must Agents Follow? By law, an agent must follow certain rules and guidelines. As such, an agent is not allowed to • Be the beneficiary of a life insurance policy the agent has sold you - unless the agent is a family member or a funeral director, • Misrepresent any aspect of the policy being sold or a policy you already own, • Encourage you to put incorrect information on your application, 23 • Accept an application with blank spaces, and then fill them in with incorrect or misleading information (called clean sheeting), or • Represent life insurance as anything other than life insurance; the agent should not lead you to believe that life insurance is an investment. How Will My Agent Explain My Life Insurance Options? Insurance agents often use illustrations to show their customers how policies work. Insurance illustrations are not pictures, they are math tables and are often several pages of columns and rows of numbers. Illustrations in older policies may have had as much as a full page of footnotes. Today, illustrations must label columns of "non-guaranteed elements" (projections) in the column heading. This information cannot be hidden in footnotes. All guaranteed items must be shown before those which are non-guaranteed. Also, each page must be numbered and show total pages. A statement such as the following must appear: "Page 3 of 9. Not valid unless all 9 pages are included." What Will The Policy Illustration Look Like? Every life policy issued in Ohio since October 1997 must include each element listed below. Narrative summary — This section of the illustration must provide the following: • A description of the policy plus a statement that it is a life insurance policy, • A description of the premium, • A description of any policy features, riders or options, and • Definitions of column headings and key terms. Numeric summary — This part follows the Narrative Summary and has a short table with three sets of columns. • The guaranteed columns have the lowest values on the page, but you can count on them. • The non-guaranteed illustrated columns show the best projections at that time. • A third set of columns show projections that fall some place between the guaranteed items and the non-guaranteed items. • All columns are shown for policy years 5, 10, and 20, and when you reach age 70. This portion of the illustration also includes statements which you and the agent must sign. These statements say the agent has explained - and you understand - that projections are not guaranteed. Tabular detail — This section has tables with policy values at specified years of the contract. These tables show more detail than the numeric summary. • Premiums, benefits, surrender values and possibly other values are shown. • Values are shown on both a guaranteed and a non-guaranteed basis. • Tables must show all of the first 10 years, and every fifth year after that, ending when you reach age 100 or when the policy matures. Supplemental illustrations — A supplemental illustration can be included if it is presented at the same time and does not show non-guaranteed elements that are more favorable than those in the basic illustration. Supplemental illustrations must comply with all the same rules for basic illustrations. Note: Life illustrations since 10/97 must state: "This illustration assumes that the currently illustrated non-guaranteed elements used will not change for all years shown. This is not likely to occur, and actual results may be more or less favorable than those shown." Life Insurance Options 24 What Should I Look For When Choosing An Insurance Company? The most important thing to know is whether the company you buy insurance from today will be able to pay death benefits when you die. Choose a company with a good reputation and history. Also, make sure the company is licensed in Ohio. You can check Ohio-authorized companies by • Visiting the Department of Insurance web site: www.ohioinsurance.gov, or • Calling the Ohio Department of Insurance Consumer Services: 1-800-686-1526. What Is A Private Rating Firm? Several private agencies specialize in evaluating the finances and services of insurance companies. Each of these organizations has its own methods and standards and gives grades to companies based on their judgment of how well the company is doing. The phone numbers and web site addresses below will connect you with some of the most popular rating firms. The grading systems for each firm may vary; for example, one firm may use "A+" as its top grade, while another may go all the way up to “A+++.” Make sure you understand what a rating means before you rely on it. Note: The rating firm may charge you for reports on insurance companies. A.M. Best Company Phone: (908) 439-2200 Web site: www.ambest.com Fitch Investor's Service Phone: (212) 908-0500 Web site: www.fitchibca.com Moody's Investor Service Phone: (212) 553-0377 Web site: www.moodys.com Standard & Poor’s Phone: (212) 438-1000 Web site: www.standardandpoors.com Insurance Tip: Many private firms that specialize in rating insurance companies also publish books with their information. So you might find what you need at your local library. Remember: The Ohio Department of Insurance DOES NOT rate or recommend insurance companies! Rating Firms Who Makes Sure That Companies Stay Financially Sound? The first responsibility of the Ohio Department of Insurance is watching the financial stability of the hundreds of companies that sell insurance in Ohio. State law requires insurance companies to file financial reports every year and the Department conducts regular audits. When a company gets into financial trouble, the Department can take stronger actions. • Limit or prohibit new sales in Ohio • Stop the company from renewing policies that are not guaranteed renewable • Declare the company insolvent and ask a court to order liquidation of its assets 25 What Does Liquidation Mean? Liquidation is much like bankruptcy. When the state liquidation office takes over a failed company, it sells the assets and pays claims and death benefits. Some benefits may be paid in full, but there often is not enough money to pay everyone. Too little money caused the liquidation after all! That's why Ohio established OLHIGA. Note: If your insurance company is liquidated, you will receive specific information about how your claims will be handled. What Is OLHIGA? Ohio established the Ohio Life and Health Insurance Guaranty Association (OLHIGA) in 1990. Every state has a similar association. All companies licensed to sell life or health insurance in Ohio are required to belong to OLHIGA. When a member company is in financial trouble, OLHIGA collects money from each of its members and then pays part or all of the unpaid claims. Does OLHIGA Provide 100% Protection? No, OLHIGA does not provide 100% protection. Different kinds of policies have different limits. • Annuity: $100,000 — even if you have more than one annuity, OLHIGA will pay you no more than a total of $100,000. • Life policy (death benefit): $300,000 • Life policy (cash surrender): $100,000 • Health policy: $100,000 Ohio Life and Health Insurance Guaranty Association Does OLHIGA Protect Me If I Move To Another State? No, OLHIGA protects only Ohio residents and their beneficiaries, regardless of where the policy was purchased or where the company has its headquarters. If you bought in Ohio but now live in another state, you are probably protected by a guaranty association in that state. For more information, call OLHIGA: 614-442-6601. Are There Certain Steps I Should Take To Resolve A Dispute? In most cases, you do not need a lawyer to resolve disputes with an insurance company. Insurance is a very competitive business. If you give the company a chance, you will generally find them willing, if not eager, to straighten out problems. Start with your insurance agent. If your concern is not addressed, contact the company's customer service office. Most companies have toll-free numbers. If customer service falls short of your expectations, ask about the company's procedures for appealing decisions. 26 What Should I Do If My Self-Help Efforts Fail? If your self-help efforts fail, the next stop is the Ohio Department of Insurance Office of Consumer Services. Call 1-800-686-1526, and ask to speak with a life insurance analyst. You can also visit the Department’s web site at www.ohioinsurance.gov. Your analyst will answer questions over the phone and explain any additional steps you should take to resolve your own problem. Our staff will give you honest, unbiased answers. If it sounds as if the company has done nothing wrong, we will tell you. If our explanation does not satisfy you, we will send you a complaint form and instructions for filing a written complaint. Generally, we will send the company a copy of your complaint and ask the company to resolve it or explain their side of the dispute. Afterwards, your analyst will review all the facts to make sure the company follows its contract with you as well as insurance regulations. Companies are required by law to respond to the Department, and most companies are very cooperative in resolving consumer complaints. You can also file a complaint about an insurance company or an agent online by going to www.ohioinsurance.gov. Are Complaints Tracked By The Ohio Department Of Insurance? Each year about 1,000 consumers complain to the Department about life insurance and annuity contracts. If the complaint raises questions that require us to contact the agent or company, it is registered in our computer as a "complaint." A complaint is a written expression of dissatisfaction from a consumer who is in some way unhappy with the company or agent. A consumer complaint does not necessarily mean the company has done anything wrong, even though the paperwork has been filed. Complaints Filed With The Department of Insurance What Are The Most Frequent Complaints About Life Insurance? The most frequent complaints are • Misrepresentation • Information requested • Coverage question • Claim denial Complaint Ratio Look at the next page for consumer complaint information on many companies. The “complaint ratio” column is a tool that helps make it easier to compare complaints against companies. Example: If a company has a complaint ratio of 1.00, it had one (1) consumer complaint for every $1 million of written premium. 27 Complaints/ Chart Life insurance Annuities Total number: Authorized life insurance companies in Ohio in 2004… 537 Total number: Authorized life companies with complaints in 2004 …. 235 Total number: Complaints in 2004 involving authorized life insurance companies… 898 Total number: Life insurance companies with 10 or more complaints in 2004… 15 Total number: Consumer life insurance and annuity complaints received by the Ohio Department of Insurance in 2004… 971 TOP 10 REASONS FOR LIFE INSURANCE / ANNUITY COMPLAINTS IN 2004 6. Claim delay (49) 7. Premium refund (46) 8. Cash value (44) 9. Unsatisfactory Settlement Offer (22) 10.Policyholder service delays /responsiveness (21) Total complaints represented by the above Top 10 reasons = 756 That represents 78% of the 971 total life & annuity complaint registered in 2004 1. 2. 3. 4. 5. Misrepresentation (188) Information requested (129) Coverage question (108) Claim denial (90) Premium notice & billing issues (59) COMPANIES WITH 10 OR MORE COMPLAINTS IN 2004 2004 total complaints 50 43 43 40 34 28 24 19 15 14 12 13 11 10 10 366 2004 written premium in $$ $223,560,496 $207,834,287 $406,968,928 $51,847,430 $36,042,414 $62,004,824 $11,089,685 $20,661,730 $86,682,155 $54,480,654 $206,044,386 $24,844,347 $169,493,308 $8,152,546 $603,806,697 $2,173,513,887 Complaint ratio 0.22 0.21 0.11 0.77 0.94 0.45 2.16 0.92 0.17 0.26 0.06 0.52 0.06 1.23 0.02 0.17 28 Totals for the companies on this chart Life insurance company Western-Southern Life Assurance Company Prudential Insurance Company of America Metropolitan Life Insurance Company Monumental Life Insurance Company American General Life & Accident Insurance Company Western and Southern Life Insurance Company United Insurance Company of America Globe Life & Accident Insurance Company American General Life Insurance Company Jefferson Pilot Financial Insurance Company Nationwide Life Insurance Company John Hancock Life Insurance Company Midland National Life Insurance Company Conseco Life Insurance Company Allianz Life Insurance of North America The Department of Insurance researched Ohio companies to identify those with the greatest amounts of total written premium for life insurance in the state and asked each company to supply contact information. The following list shows company names and contact information for new customers. Notes: • Companies marked (G) market to groups only. • Some companies have changed names or merged with other companies. Read the footnotes at the bottom of each page for details. • A few companies with written premium amounts sufficient to qualify for the list were removed because they are not currently marketing life • insurance products to new customers in Ohio. Company name Customer phone Internet address Aetna Life Insurance Company (G) Allstate Life Insurance Company American General Life And Accident Insurance Company American General Life Insurance Company American Income Life Insurance Company American United Life Insurance Company Amerus Life Insurance Company Chapter 6 Company List and Contact Information 29 Anthem Life Insurance Company (G) Banner Life Insurance Company Cincinnati Life Insurance Company Clarica Life Insurance Company - US *a* CM Life Insurance Company Columbian Life Insurance Company Columbus Life Insurance Company Connecticut General Life Insurance Company (G) CUNA Mutual Insurance Society Equitable Life Assurance Society (US) *b* Farmers New World Life Insurance Company First Colony Life Insurance Company First Penn-Pacific Life Insurance Company Forethought Life Insurance Company Fortis Benefits Insurance Company (G) GE Life And Annuity Assurance Company General American Life Insurance Company Globe Life And Accident Insurance Company Grange Life Insurance Company Great-West Life & Annuity Insurance Company Call a local agent 800-336-9400 Call a local agent 800-247-8837 800-686-0042 800-537-6442 800-800-9882 800-551-7265 Call a local agent Call a local agent (802) 229-3747 800-272-2216 800-423-9765 800-677-9696 800-644-5567 800-356-6006 800-777-6510 Call a local agent 888-325-5433 800-444-2363 800-648-0075 800-543-7266 888-882-2276 800-638-9294 800-654-5433 800-422-0550 Call a local agent NA allstate.com agla.com aigag.com ailife.com oneamerica.com ameruslife.com anthem.com lgamerica.com cinfin.com nationalife.com massmutual.com cfglife.com columbuslife.com cigna.com cunamutual.com axa-equitable.com NA genworth.com lfg.com forethought.com assurantbenefits.com genworth.com genamerica.com globeontheweb.com grangemutual.com gwla.com *a* Merged into Midland National Life Insurance Company November 2004. *b* Name changed to Axa-Equitable Life Insurance Company September 2004. Company name 866-425-4542 888-747-8819 800-833-5575 888-747-8819 800-477-3633 homesteaderslife.com americanexpress.com indianapolislife.com NA jnl.com jpfinancial.com jpfinancial.com johnhancock.com johnhancock.com chaseinsurancecompany.com libertymutual.com cigna.com accessallstate.com lfg.com johnhancock.com massmutual.com fdl-life.com metlife.com midlandnational.com (651) 665-3500 Call a local agent Call a local agent Call a local agent 888-876-6542 (802) 229-3333 800-543-3747 800-638-5000 800-695-9873 800-598-2019 877-872-0757 800-807-2665 minnesotalife.com aegonins.com axa-equitable.com axa-equitable.com motoristslife.com nationallife.com nationwide.com metlife.com newyorklife newyorklife nacolah.com northwesternmutual.com Call a local agent 800-428-7031 860-723-3452 800-644-4565 800-487-1485 800-487-1485 800-732-5543 800-732-5543 800-321-9313 800-451-7065 800-828-3485 800-525-2799 Call local agent 800-732-5543 800-272-2216 800-544-9000 800-638-5000 800-923-3223 thehartford.com thehartford.com thehartford.com guardianlife.com Customer phone Internet address Guardian Life Insurance Company Of America Hartford Life And Accident Insurance Company (G) Hartford Life And Annuity Insurance Company Hartford Life Insurance Company (G) Homesteaders Life Company (A Mutual Company) IDS Life Insurance Company Indianapolis Life Insurance Company ING Life Insurance And Annuity Company Jackson National Life Insurance Company Jefferson Pilot Financial Insurance Company Jefferson-Pilot Life Insurance Company John Hancock Life Insurance Company John Hancock Variable Life Insurance Company Kemper Investors Life Insurance Company Liberty Life Assurance Company Of Boston Life Insurance Company Of North America (G) Lincoln Benefit Life Company Lincoln National Life Insurance Company 30 Manufacturers Life Insurance Company (USA) *c* Massachusetts Mutual Life Insurance Company Medical Life Insurance Company (G) *d* Metropolitan Life Insurance Company Midland National Life Insurance Company Minnesota Life Insurance Company Monumental Life Insurance Company MONY Life Insurance Company MONY Life Insurance Company Of America Motorists Life Insurance Company National Life Insurance Company Nationwide Life Insurance Company New England Life Insurance Company New York Life Insurance And Annuity Corporation New York Life Insurance Company North American Company For Life And Health Insurance Northwestern Mutual Life Insurance Company *c* Name changed to John Hancock Life Insurance Company (USA) January 2005. *d* Merged into Fort Dearborn Life Insurance Company December 2004. Company name 800-366-6654 800-366-6654 800-800-7681 Customer phone ohionational.com ohionational.com pacificlife.com pennmutual.com Internet address Ohio National Life Assurance Corporation Ohio National Life Insurance Company Pacific Life Insurance Company 800-523-0650 800-322-1887 800-322-1887 phoenixwm.com 800-555-7542 800-257-4725 800-986-3343 800-866-9933 800-321-3889 Penn Mutual Life Insurance Company Phl Variable Insurance Company physiciansmutual.com primerica.com principal.com protective.com phoenixwm.com Phoenix Life Insurance Company Physicians Life Insurance Company Primerica Life Insurance Company Principal Life Insurance Company Protective Life Insurance Company Provident Life And Accident Insurance Company Pruco Life Insurance Company 800-778-2255 800-778-2255 800-637-4475 800-351-7500 877-882-5050 877-882-5050 800-277-8762 888-283-8538 Call a local agent 800-862-6266 Call a local agent Prudential Insurance Company Of America Reassure America Life Insurance Company unumprovident.com prudential.com prudential.com NA rsli.com ing.com/us ing.com/us southlandnational.com standard.com Reliance Standard Life Insurance Company Reliastar Life Insurance Company Security Life Of Denver Insurance Company 31 800-334-4298 Southland Life Insurance Company *e* Standard Insurance Company (G) State Farm Life Insurance Company Sun Life Assurance Company Of Canada (G) Transamerica Life Insurance Company statefarm.com sunlife-usa.com aegonins.com aegonins.som Transamerica Occidental Life Insurance Company Call a local agent NA 800-825-1551 (800) 777-8467 (800) 775-6000 (800) 282-4652 Travelers Life And Annuity Company travelerslifeandannuity.com unicare.com Unicare Life & Health Insurance Company (G) Union Central Life Insurance Company United Insurance Company Of America United Of Omaha Life Insurance Company unioncentral.com NA mutualofomaha.com Unum Life Insurance Company Of America US Financial Life Insurance Company Valley Forge Life Insurance Company West Coast Life Insurance Company unumprovident.com usfli.com swissre.com westcoastlife.com 800-959-3894 800-437-8854 800-366-1373 800-926-1993 800-851-9777 800-926-1993 Western And Southern Life Insurance Company westernsouthernlife.com westernreserve.com Western Reserve Life Assurance Company Of Ohio Western-Southern Life Assurance Company westernsouthernlife.com *e* Merged into Security Life of Denver Insurance Company October 2004. Chapter 7 Glossary Accelerated Death Benefit: A policy provision or rider that lets you collect part of your death benefit before you die. If you have a terminal illness the policy advances you a specified part of your death benefit to pay medical bills or other expenses. The amount is subtracted from the death benefit your beneficiary receives. Some policies also permit you to use the death benefit to pay for long-term care (nursing home) expenses. Also called living need. Accidental Death: A provision or rider that promises to pay more (usually double) if you die in an accident. Also known as double indemnity. Actuary: A mathematics expert who applies probability theory to the business of life insurance and is responsible for calculating premiums, policy reserves and other values. Administrative Fee: Charges some policies deduct from cash value accumulation each year. Administrative fees are often highest in the first few years after you buy the policy. Agent: A person licensed by the state to represent an insurance company. An agent must attend at least 40 hours of insurance classes to get a license and take continuing education classes to keep the license. Annuity: A contract purchased through an insurance company, usually in order to accumulate funds that can be used after retirement. After a specified age, the insurance company promises to pay you monthly (annuity) payments. The company is taking the risk that you could live longer than expected, meaning the company would pay you more than you had invested. Annuitant: A person who receives an income benefit from an annuity. Assignment: Giving rights under the insurance policy to someone else. You can assign beneficiary rights or policy ownership. Automatic Premium Loan: A provision in a policy that authorizes the insurance company to use money from your cash value to pay premiums. Attained Age: The actual age you have reached at any given time. Beneficiary: The person you designate to be paid a death benefit when you die. A policy may have one or more beneficiaries. Burial Policy: A policy with a relatively small death benefit, intended to cover your funeral and burial expenses. Cash Value: The "savings" portion of a life policy. When your premium payments are more than the cost of insurance, the excess goes into a cash value account and draws interest. Certificate: The evidence of coverage received by persons insured through a group life policy. Glossary 32 Churn: Insurance agents “churn” their business when they repeatedly persuade their customers to replace existing policies with new ones. An agent may be tempted to churn because commissions are higher in the first year of the policy or because the agent has begun representing a different insurance company. CLU: Charted Life Underwriter. A title that agents and other insurance professionals can achieve after taking a series of classes and passing exams. An agent with CLU after his or her name should know a lot about life insurance. Commission: The portion of your premium payments that goes to the insurance agent who sells the policy. Agents typically receive a percentage of each premium payment you make. The percentage may be highest in the first year you buy the policy. Commissioner: The title that many states give to the official in charge of regulating insurance companies. In Ohio, this person is called the Director or Superintendent of the Department of Insurance. Contestable Period: In Ohio, an insurance company can challenge a life insurance policy during the first two years after issue. During the contestable period, the insurance company can cancel the policy (if you are still living) or refuse to pay a death benefit because it discovers your answers on the original application were misleading or false. Conversion: Changing a term life policy to some other form. This can be done only when the policy is described as convertible. Cost of Insurance: The amount a company calculates that it needs to insure your life. Although your insurance premiums may never change, the cost of insurance goes up every year because you are unavoidably getting closer to death. And each year an increasing amount of your premium payment for a cash value policy is used to pay for insurance - and less goes to cash value. Credit Life: A policy intended to pay off a debt (loan for car, furniture, appliances, etc.) if you die. Death Benefit: The money that a life insurance policy promises to pay your beneficiary when you die. Decreasing Term: A term life policy whose death benefit goes down each year. Credit life insurance is a form of decreasing term; because your loan balance is lower each year, you need less insurance to cover it. Debit Policy: A form of life insurance which requires the agent to collect your premiums on a weekly or monthly basis. Dividends: When a company collects more money from policyholders than is needed to cover the cost of insurance, profit and other expenses, the company may return some of the money as a dividend. Dividends are paid only if you have a "participating" policy. You generally can choose to receive the dividend as a cash payment, apply it to your premium payments, buy more insurance, or add it to the policy's cash value. Dividends are like a bonus. There is no guarantee that the company will pay dividends. Double Indemnity: See Accidental Death. Endowment: A cash value policy that sets a specific time at which the cash value will equal the death benefit. If you buy a $10,000, 20-year endowment policy, you will immediately be insured for $10,000. If you are still living at the end of 20 years, you will receive $10,000 in cash. Glossary 33 Equity-Indexed Annuity: A contract that combines a guaranteed minimum interest rate with earnings linked to the performance of an external stock or bond index. Face Amount: The sum a policy promises to pay when the insured person dies, or at the maturity of the contract. Family History: Information about medical or mental problems of your parents and other family members. Companies may charge you higher premiums or reject you if your family has a history of cancer, heart attacks, or such diseases as Huntington's. Financial Rating: A private firm's evaluation of the financial stability of an insurance company. There are numerous rating services and each has its own grading system. First to Die: Provision in a policy that insures both husband and wife. When the first spouse dies, the survivor collects the full death benefit. Fraud: Any time you knowingly provide false or incomplete information on an application for insurance or on a claim. Free Look: A time after you receive the policy for you to review and consider whether it is what you want. During the free look period (usually 10 days for life policies) you can review, cancel, and return it for a full refund of any premiums you have paid. The free look period for replacement life policies is 20 days. Genetic Testing: Using modern scientific analysis of your blood to determine whether you have any genetic defects that might make it more likely that you would die earlier than the average person. Ohio permits insurance companies to use the results of genetic testing for life insurance policies, but only a few companies require genetic testing. Glossary Grace Period: The time after an insurance premium is due during which the premium can still be paid with no interest charged, and coverage remains in force. This period is usually 30 or 31 days. Group Life: A policy issued to an employer, association, or other organization. Employees or association members obtain insurance as group members and receive certificates rather than policies. Group life policies are usually annual, renewable term with an option to convert to an individual policy when you leave the group. Guaranteed Issue: A policy that is sold to all applicants without regard to their health. Because the company does not exclude high risk people, guaranteed issue policies are generally more expensive than policies that underwrite (screen out) applicants. Guaranteed Rate: The only interest amount that the insurance company promises to pay on any cash value in the policy. The guaranteed rate is generally much lower than nonguaranteed projections the company may make in its illustrations. Illustration: An insurance company's explanation of how the life insurance policy will work. An illustration projects the policy into the future, showing each year's premium payment and death benefit as well as any guaranteed interest payments and the company's description of additional benefits that might be paid if the company does well. Industrial Life: The same as debit policy. 34 In Force: A policy is "in force" when all conditions have been met to establish or maintain the company's obligation to pay if you die. Insurable Interest: In order to be the owner and beneficiary of a life insurance policy, there must be some relationship to the insured person. This protects you from the stranger who might have murder in mind when he takes out a million dollar policy on your life. Family members have insurable interests in each other, and employers have insurable interests in their employees. Interpleader: A legal procedure used by insurance companies when there is a dispute over who is entitled to the death benefit. Interpleader resembles escrow, with the court holding the money until the dispute is resolved. Irrevocable Assignment: Permanently signing over your policy rights to someone else. Irrevocable means you cannot take it back. Lapse: The termination of an insurance policy as a result of failure to pay the premium. Liquidation: Similar to bankruptcy. A state official serves as the company's liquidator, and attempts to meet the company's fiscal obligations (e.g., paying claims) by "liquidating" its assets. Living Need: See Accelerated Death Benefit. Loan: If your policy has accumulated cash value, you may borrow part of it. Interest rates are generally better than bank rates. The amount you borrowed will be deducted from your death benefit until you have repaid it. If your loan and accumulated interest add up to more than the cash value, the policy will lapse. Low Value Policy: A life insurance policy that has a high premium and small death benefit. Morbidity: The frequency of sickness and accidents among a group of people. Mortality Charge: The cost of insuring you at your current age. Mortality Tables: Mortality tables are statistics that show how long people are expected to live under various situations (women longer than men, smokers shorter than non-smokers, etc.). Companies use mortality tables to calculate the cost of insuring you at any specific age. Nonforfeiture: If you cancel a cash value policy after several years, the company is required to refund part of the cash value. Many options are also available to you other than a lump sum payment. Non-Participating (Non-Par): A policy that is not eligible for dividends. Ohio Life and Health Insurance Guaranty Association (OLHIGA): A state-authorized, non-profit corporation established to protect cash values and pay death benefits of companies that have financial problems or become insolvent (bankrupt). Every company selling life and health insurance in Ohio must belong and members contribute relative to company size. Outlay: The amount you pay the insurance company for insurance (same as premium). Paid-up Additions: Additional insurance purchased with policy dividends. Glossary 35 Paid-Up: A policy on which all premium payments have been made. Although you are still alive, you do not have to make any more payments, and your beneficiary is assured a full death benefit. Participating Policy: A policy that has the possibility of paying dividends. Always remember that dividends are never guaranteed. Payout Method: See Settlement Option. Policy Owner: The person who contracts with an insurance company for a life insurance policy. The owner of the policy has the right to designate beneficiaries. Ordinarily you are the owner of the policy on your own life, but you might also be the owner of policies on the lives of your children. You can sell the ownership to a stranger, who could then make himself the beneficiary of your policy (see Viatical Settlement). Preferred Rate: The rate the company charges people who have the lowest risks. These people are called preferred risks. Premium: The amount you pay the insurance company for insurance (also called outlay). Pre-need Contract: A contract with a funeral home that makes it possible to pay your funeral expenses in advance. The terms of pre-need contracts are regulated by Ohio law. Reinstatement Period: Restoration of a policy that has lapsed due to non-payment of premium after the grace period has ended. The reinstatement period in life insurance is 3 years from the premium due date. You must pay all past due premiums plus interest and prove insurability to have a policy reinstated. Renewable Term: A term life policy that guarantees you the right to renew at the end of the term. Replacement: An insurance agent "replaces" your policy when he sells you a policy to take the place of one you already have. Ohio law requires you to sign replacement forms whenever money from one policy is used to buy or fund another policy. If the new policy is with a different company, the agent must notify your old company. The old company then has a chance to persuade you not to switch (called "conservation"). The free look period when replacing a life policy is 20 days. Rider: An addition or amendment to an insurance policy. Risk: The likelihood that you will die while insured. Young, healthy children are the lowest risks. Old folks and skydivers are very high risks. life insurance companies charge a premium appropriate to the risk. Risk Factor: Things about you that affect your risk. Some examples: older age, smoking, hazardous occupation, family history of heart disease, etc. Settlement Option: How a beneficiary receives payment of the death benefit. The company may pay a lump sum or set up a money market account in the beneficiary's name and give the beneficiary the choice of leaving the money in the account or withdrawing part or all of it. Glossary 36 Suicide Clause: A life insurance policy will not pay a death benefit if you commit suicide within the first two years after you buy the policy. Surrender Charge: If you surrender an annuity or life policy prematurely, the company may deduct a fee from the amount it owes you. TAMRA: Technical and Miscellaneous Revenue Act. A 1988 federal law that created a new class of life insurance contracts. These contracts' policy loans and surrender payments are subject to taxation rules similar to deferred annuities. Term Life: The simplest form of life insurance, it generally offers no cash value feature. You pay a premium and the company promises to pay your beneficiary if you die. The policy lasts for a specific length of time or "term," such as 1, 5, 10 or more years, or to a designated age such as 65 or 100. If you are living at the end of the term, the policy expires unless the company agrees to renew it. Renewal premiums are based on your attained age. Sometimes called temporary insurance. Underwriting: The insurance company's process for determining whom it will insure. An underwriter's decision may be based on your life insurance application, physical exam, medical records, and other information to determine whether you meet the company's standards. Universal Life: A flexible-premium life insurance contract which accumulates values and pays a death benefit. You choose the policy's premium and face amount, and you can adjust these as long as the policy is in effect. It is possible that the cash value will earn more than the guaranteed minimum interest rate. It is also possible that the cash value will grow faster than is needed to cover the cost of insurance. Vanishing Premium: An insurance company's projection on an illustration suggesting that your policy could reach a point where you would not have to make premium payments because the policy would have enough cash value to take care of the premiums. Variable Life: A type of whole life insurance in which the face amount and cash value rely on the investment performance of a special fund. Reserves are placed in investment accounts that are separate from the company's general account. Most policies guarantee a minimum face amount, but a cash value minimum is rarely guaranteed. Viatical Settlement: An agreement to sell the ownership of your life insurance policy to another, unrelated person, who becomes both the owner and beneficiary of the policy. A 2001 state law gives authority to the Ohio Department of Insurance to license companies & individuals who deal in viaticals. Waiver of Premium: A provision that suspends your obligation to pay premiums when you are disabled or you meet some other policy requirement. This is a common feature in life insurance polices. Whole Life: Life insurance with a savings feature. Premiums generally are the same (level) every year. When you are young, your premiums are more than the cost of insuring your life at that time. The excess amount accumulates and resembles a savings account, called cash value. This excess is used by the company to insure you later in life, when your level premium is no longer enough to cover you. Glossary 37 To request consumer publications or ask questions about insurance, please call the Ohio Department of Insurance consumer lines: Medicare issues... 1-800-686-1578 Other types of insurance...1-800-686-1526 Fax (614) 644-3744 For many Department services and publication updates, please visit our web site... www.ohioinsurance.gov The Ohio Department of Insurance is an Equal Opportunity Employer. 50 West Town Street — Suite 300 Columbus, Ohio 43215 Presorted Std U.S. Postage PAID Columbus, Ohio Permit No. 4892 Ted Strickland Governor Mary Jo Hudson Director