The insurance industry is not federally regulated, each state dictates the products they allow to be sold and every life insurance policy is analyzed before it can go to the market. In the 1940’s congress thought it best for the business of insurance to be left to individual states. This means one state like Idaho could have every product under the sun approved which gives the consumer a ton of options to choose from while Washington State next door could have roughly one third of the products available. A lot of people argue state regulation of the insurance industry is extremely inefficient, but good luck getting states to give up their foot hold on the money generated from gate keeping the insurance industry. Every insurance company has to pay each state money in order to get their insurance products approved which is extremely costly and confusing because states can approve or not approve products for whatever reason they want. It is undisputed the fifty plus jurisdictions denies consumers the creativity of the free market for insurance companies to design and market the best insurance policies because it takes so much time for insurance carriers to abide by each states’ regulators. A handful of Washington insurance agents used to drive clients to Idaho in order to provide clients with a superior insurance product. It used to be that people did not have to reside in the state they would like the insurance product to be issued because insurance companies would just go by where the application was signed. About ten years ago state insurance regulators caught on to these agents and cracked down on the insurance companies to make sure applications are now signed in the state in which the insured lives. A possible solution for the insurance industry would be federal regulation which could make for a more efficient business model for insurance companies and streamline innovative products for consumers.
The current insurance commissioner of Washington State (who has been elected four times since 2000) has an extensive background in health insurance and is widely respected by the National Association of Insurance Commissioners. With congress passing the Affordable Care Act it has been argued the insurance commissioner has been more focused on health insurance which has hindered the progress of life and annuity products getting approved in Washington. This can make it very difficult for for agencies outside of the state to stay up to speed because they assume certain products available in other states are approved in Washington when they are not. Pacific Insurance Group specializes in life insurance all over the United States but the majority of agents work in Washington and know the available insurance products extremely well. There are a great deal of insurance carriers in Washington who have to alter or redesign their products in order for the office of the insurance commissioner to approve them for sale. For example annuity contracts in other state have much larger bonuses on their products whereas in Washington State the regulators force the insurance companies to redesign their products which usually means a reduction of the bonus to the consumer. It is extremely important if you live in the State of Washington to work with an agency who has extensive knowledge of the insurance products and variations so you can be assured of the best solution for your need.
One life insurance product approved in Washington State has accelerated living benefits for terminal, chronic, and critical illnesses which can pay out while you are still alive if your illness qualifies for the acceleration of the death benefit. This product has certain variations in other states which makes it extremely appealing if you reside in Washington and are looking for life insurance. Other life insurance companies approved in Washington State offer return of premium term life insurance which guarantees you to receive all your premiums back at the end of the term coverage period. Unfortunately there are only a handful of carriers who offer return of premium life insurance policies in the State of Washington which typically do not show up on a lot of instant term life quoting engines. If you live in Washington and are searching for life insurance it is important to make sure the information you receive is applicable to the products available that will meet your needs. If you would like to speak with a Pacific Insurance Group specialist please call or email our office.