New York Requires Life Insurers To Pay Out Active Duty Deaths
New York regulators are requiring life insurance companies to pay out fully when members of the military are killed in action as the new standard. Previously, insurers automatically established a checking account that provided interest to the companies. Benjamin Lawsky, the State Financial Services Superintendent, said that New York is the first state to require this type of payout to beneficiaries.
According to the article by the Associated Press on WashingtonPost.com, families can often get a better return on interest if they receive a bulk payment and invest it wisely. This can be a better option than drawing down on the retained asset accounts that many insurers offer their beneficiaries. Under the accounts, families get some of the return on interest but the company gets some of it as well.
There hasn't been a comment yet from The Life Insurance Council of New York, Inc, a statewide lobbying group, but they are sure to have a strong opinion on the new measure. Families will still be able to use the accounts if they wish, but they will now have the option to choose.
Lawsky emphasizes how soldiers deserve to get what they expect from life insurers, and the companies should not be padding their pockets at the expense of these brave men and women. The new order will apply to life insurance companies operating in the state of New York which will ultimately affect many Americans across the nation.