If you live in New York and need life insurance, New York has very specific rules that need to be followed if you are replacing an existing life insurance policy.
Known as Regulation No. 60, New York has the most complicated and confusing replacement rules of any state we work with…The good news is that we know the Reg 60 rules and will show you exactly what needs to be done in order to replace your life insurance policy in New York.
Here’s What You Need to Know about Regulation 60
What is a Replacement?
If you have an existing life insurance policy and are going to get rid of that life insurance policy, that is considered a replacement. It’s no big deal, it just requires a few additional documents as part of the life insurance application……unless you live in New York.
Life Insurance Replacement in New York
New York requires that a few additional steps and timelines be followed if a life insurance replacement is involved. If you don’t follow these rules, your life insurance application will be rejected by the life insurance company you apply to.
Definition of Replacement
Every application for life insurance in New York requires that a “Definition of Replacement” form be completed.
The Definition of Replacement form asks if you will be lapsing, surrendering, canceling, reducing the face amount, changing policy to a paid-up insurance policy, assigning the policy as collateral, stopping premium payments, etc..
If you answer “yes” to any of the above, New York life insurance laws consider this to be a replacement under regulation 60.
I’m replacing my New York life insurance policy, now what?
The following regulation 60 replacement steps must be followed:
- Your agent will submit an authorization form to the existing life insurance company, requesting information about your existing life insurance policy.
- Wait 20 days – The existing insurance company has 20 days to respond to your agent before the next steps can take place.
- After 20 days: If No response is received from existing life insurance company, your agent completes a “good faith approximation” and gives you the client a copy of this form. If the existing insurance company does respond, they will give your agent information about your life insurance policy, that your agent then uses to complete a disclosure form and gives this disclosure form to you.
- After this 20 day period of time has passed, your agent may then have you complete the life insurance application and will submit it to the new insurance company.
- When the new life insurance company receives your application, they are required to review your application for accuracy. If there are any errors or items missing on the application, you have 10 days to correct this info or your application will be rejected by the life insurance company and you will have to start the entire process from the beginning.
That’s it. In general, when you are replacing a life insurance policy in the State of New York, the regulation 60 replacement rules will add 20 days to the underwriting timeframe…but as long as you follow the rules, that will be the only delay in your life insurance processing.
Please note that we are not doctors and do not offer medical advice. Our information is for educational and informational purposes in order to help you obtain life insurance.