Sec.38a-457-2. Type of product

(a) The risks insured under accelerated benefit riders and life insurance policies with accelerated benefit provisions shall be considered primarily mortality risks rather than morbidity risks; therefore, such riders and policies are considered to provide life insurance benefits.

(b) An accelerated benefits life insurance policy shall not include a policy providing for disability income protection coverage, or long term care coverage, as defined in Sections 38a-501 and 38a-528 of the General Statutes. For purposes of this subsection, disability income protection consisting of no more than $20 per $1,000 of coverage shall not constitute “a policy providing for disability income protection coverage.”

(c) Death benefits may not be reduced more than the amount of the accelerated benefits paid plus any applicable actuarial discount appropriate to the policy design for policies without additional premium payments. When an accelerated benefit is paid, the amount paid may be considered as (1) a pro-rata reduction in cash value or death benefits, or both, or (2) a lien against the death benefit of the contract and the access to the cash value shall be restricted to any excess of the cash value over the sum of other outstanding loans and the lien.

(d) The company may set a minimum benefit amount, but in no case shall it be more than 25 percent of the face value of the policy.

(e) The accidental death benefit, if any, in the policy shall not be affected by the payment of the accelerated benefit.

(Effective October 23, 1992)