House Bill Expands Life Insurance Benefits

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Folks in Michigan might soon have more ways to pull funds from their life insurance policies.

Thursday the House passed a bill that would allow people to use certain money from their life insurance plan if they are diagnosed with a "chronic illness."

For Representative Tom Cochran, the bill is personal.

"I just lost my mother this past December, and my father passed away two years ago," said Representative Cochran, a democrat from Mason. "My mother had suffered a stroke."

Rep. Cochran said he understands how challenging the final years can be and money problems only make things worse. So he sponsored a bill that expands the use of "accelerated benefits" from life insurance to those with a "chronic illness."

A chronic illness is defined as a permanent medical condition that makes an individual unable to eat, toilet, bath, groom, dress or ambulate. Chronic illness also includes mental illness such as cognitive impairment or dementia.

The Michigan House passed the bill unanimously with bipartisan support-- 107 to zero.

"You never know what's going to happen," said Marion Owen, the Director of the Tri-County Office on Aging. "I've worked with clients in years past who did have a nice nest egg, but it was gone because of long term care-- one or the other went into a nursing home."

Owens recommends people talk to outside experts-- other than their insurance agent, to make sure they have the coverage they want. Someone who might not have a conflict of interest, like their insurance agent.

"[People] need to know exactly what kind of insurance that they have," said Owen.

She said insurance is complicated and many people don't know what they have.

Representative Cochran said his mother had set aside money prior to her stroke, but he hopes his bill becomes law and can help others.

"This will be one more tool that families will have to assist their loved one in providing for their care," said Representative Cochran.

A way to make one of life's greatest challenges, a little easier.

House Bill 5149 is part of a package of six bills that updates the laws governing life insurance in the state. Together they now move to the Senate for consideration.

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