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Friday, September 22, 2017

What is a Life Waiver of Premium benefit?

A "Life Waiver of Premium" benefit - also called an "LWOP" benefit- is a provision that is commonly included in life insurance policies which waives the premiums normally required to maintain life insurance coverage for insureds who are disabled.

This benefit is extremely important to a disabled person because often based on her medical history, she will be unable to obtain life insurance coverage elsewhere in the free market. She also may not be able to return to work and obtain group term life insurance coverage through an employer.

Each life insurance policy that has an LWOP benefit will define "disabled". The insured needs to meet this definition to qualify to have her life insurance premiums waived. Usually the standard for being disabled is very high - for example, being unable to work in any job for any wages.

If you make a claim for LWOP benefits and the claim is denied, or if you were receiving an LWOP benefit and your benefit is terminated, if your claim is governed by ERISA you have the right to appeal that decision. Even if your claim is not governed by ERISA, your life insurance contract may allow you to appeal that decision to the insurer. You may want to hire an attorney to help with that appeal.

Contact the Law Office of Katherine L. MacKinnon for more information!

Friday, June 30, 2017

NY Times Article: Spouse's Consent is Required to Change Retirement Account Beneficiary

This article in the New York Times addresses the requirement that a spouse be informed of a change in beneficiary and consent to that change:

"WHY does a married person who has certain kinds of retirement accounts have to get his or her spouse’s permission to change the beneficiary of those accounts?

And why does a married person who is about to start receiving a pension have to get spousal permission to select a payment option that will not give the spouse at least half of those benefits for life if the pensioner dies first?

The short answer to both questions is, because the law says so. A longer answer came when President Ronald Reagan signed that law, the Retirement Equity Act of 1984.

“No longer will one member of a married couple be able to sign away survivor benefits for the other,” Mr. Reagan said, explaining that “a spouse’s written consent now will be required on any decision not to provide survivors’ protection.”

Check out the whole article here