Is Your Customer a Member of the Armed Forces or a Military Dependent?
If you are selling life insurance or annuities to an active-duty member of the Armed Forces, federal and state regulations impose very particular disclosure requirements about legal rights and access to subsidized Service member’s Group Life Insurance (SGLI). All life and annuity applications submitted for active duty members of the U.S. Armed Forces, their spouses and dependents must be accompanied by a signed Military Sales Disclosure Form.
Active Duty or Reserve?
It matters. The disclosure requirement applies to active duty military, and does not usually apply to members of the reserve component unless under orders for periods of 31 days or more. Some states (FL, NV, MA and VT) have, however, defined “active duty” more broadly, and both Florida and Vermont include reservists on drill status within the definition. You are responsible for knowing the specific requirements in your jurisdiction. Click here for additional guidance or log into www.nationallifegroup.com.
Sales on Military Grounds
Any sales or solicitations that take place on a military installation come with additional rules and requirements under both the NAIC model regulation and rules established by the Department of Defense. For example, you are required to provide a DD Form 2885, Personal Commercial Solicitation Evaluation during any initial meeting on a military installation with active duty military or with Department of Defense civilian employees. Additional rules apply to applicants of a particular rank, usually E-4 or below. It is your responsibility to be aware of these rules and any others that may be specific to a particular military installation.
When is the Disclosure Notice not required for Active Military?
- Contractual changes, conversion privileges, term conversion or programs filed with and approved by the insurance commissioner.
- SGLI and VGLI policies.
- Contracts used to fund ERISA plans, or IRC Sections 401(a), 401(k), 403(b), 408(k) or 408(p) of the Internal Revenue Code, if established or maintained by an employer.
- A §414 government or church plan or §457 deferred compensation plan.
- A non-qualified deferred compensation arrangement established or maintained by an employer or plan sponsor.
If you have any questions or require additional information, see the Policies and Procedures posted in the Market Conduct and Compliance area of the National Life Group agent portal.
Questions or comments?
Call Market Conduct & Compliance, 1-800-906-331 ext. 3129.