The Honorable Richard Roth, Chair
Senate Committee on Insurance
State Capitol Room 4034
Sacramento, CA 95814
Re: S.B. 426 (Leyva) – Support
Dear Senator Roth:
California Health Advocates writes in strong support of S.B. 426 authored by Senator Leyva. This bill will require the death benefit of a deferred annuity sold to an individual 65 years of age or older to be at least equal to the annuity value at the time death occurs.
California Health Advocates is a not-for-profit organization dedicated to providing quality Medicare and related healthcare coverage information, education and policy advocacy. California Health Advocates supports the work of local Health Insurance Counseling & Advocacy Programs (HICAP) which provide benefits counseling and community education on Medicare and long term care.
Seniors buy annuities to protect their assets and to avoid out living their money. If an insured person dies during the surrender period existing law allows companies to charge surrender penalties that can result in a death benefit payment that is less than the total premiums paid for an annuity.
S.B. 426 will require a death benefit in deferred annuities to be at least equal to the annuity amount or the accumulated value of an annuity sold to a consumer 65 years of age or older. Companies will no longer be able to reduce the death benefit below the premiums paid by a senior.
California Health Advocates urges passage of S.B. 426 to protect seniors who buy these annuity products to provide financial security for them and their families.
The Honorable Senator Connie M. Leyva
Erin Ryan, Principal Consultant, Senate Committee on Insurance