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CA Department of Insurance

Senior Insurance Bill of Rights, SIBOR

(Revised January 2014)

As a senior citizen, you have worked a lifetime to build up assets and want to take precautions to protect yourself and those assets. Purchasing insurance that meets your needs can be challenging; sometimes a product is pushed on you, sometimes you can't get what you want. Also, as your financial situation changes over time, it is important to review your insurance policies to decide if the same terms and types of insurance are still right for you.

It is illegal for an insurance agent, broker, solicitor or insurance company to misrepresent the terms or benefits of any insurance policy [California Insurance Code (CIC) §780, 781]. Further, a prospective insured 65 years of age or older is owed a duty of honesty, good faith, and fair dealing by an insurer, broker, agent and others engaged in the transaction of insurance [CIC §785, 10192.55, 10234.8]. If you are contemplating purchasing a new or replacement policy, please take note of the following precautions:

  • Obtain all proposals in writing.
  • Don't be pressured into buying any insurance product. Take enough time to review the information before making any decisions.
  • Do not sign anything you do not understand.
  • Consider having a trusted family member, friend or advisor participate in discussions concerning the purchase of any insurance product.
  • Make sure the agent, broker and insurance company are properly licensed to sell the product you are considering purchasing. You can verify a licensee status.

If you apply for insurance and are refused, you may ask your insurance company for a written explanation of the specific reason for the refusal or denial of insurance requested [CIC §791.10].

Additionally, there are special protections related to certain insurance products.

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For Life, Annuity, Long-Term Care & Medicare Supplement

Free Look Provisions - You may review a policy of Life, Annuity, Long-Term Care, or Medicare Supplement for 30 days after you receive the policy in order to decide whether you wish to keep the policy. If you return the policy to the company by the 30th day after receipt, you are entitled to a full refund of the premium paid, in a timely manner [CIC §786(a) & (b), 10127.7, 10127.8, 10127.10, 10232.7, and 10192.17(e)].

Replacement Consequences - "Replacement" means surrendering (canceling) your current insurance policy (i.e. Life, Annuity, Long-Term Care, or Medicare Supplement). You must receive a full disclosure of all information relating to the benefits and possible negative consequences regarding this replacement. [CIC §10509.4(d), 10509.2, 10192.18(d), 10192.18(e), and 10235.16].

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For Life and Annuities

  • You must be provided with a written notice from any person who meets with you in your home in connection with the sale of a life or annuity policy [CIC §789.10]. This notice must be provided to you at least 24 hours prior to the meeting and must tell you your right to:
    • Understand the reason for the meeting
    • Invite others to the meeting, including family members
    • End the meeting at any time
    • Contact CDI for information or to file a complaint
    • The name, license number, and telephone number of all persons coming to your home
  • Obtain a full disclosure of all surrender charges and related time frames in connection with a life and/or annuity policy prior to purchase [CIC §10127.13].

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For Annuities Only

  • The law requires insurance agents to ask you questions about your financial situation to make sure the annuity you are purchasing is suitable for your needs and circumstances. Insurance companies can only sell you an annuity if there is a reasonable basis to believe the annuity is suitable based on the information you provide to the agent. [CIC §10509.910, 10509.911, 10509.912, 10509.913, 10509.914]
  • An insurance agent who attempts to sell an annuity or financial product in connection with eligibility for Medi-Cal, must provide written disclosure regarding Medi-Cal eligibility [CIC §789.8). Note: You may contact the Department of Health Care Services (DHCS) to discuss Medi-Cal eligibility rules.

For Long-Term Care Only

  • Before purchasing Long-Term Care insurance, be sure the agent has provided you with an outline of coverage including all benefits and limitations [CIC §10233.5] and the Shopper's Guide developed by the California Department of Aging [CIC §10234.93(C) (9)].
  • You may designate another person to receive lapse or termination of coverage notices for non-payment of premium for Long-Term Care insurance [CIC §10235.40].
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For Medicare Supplement Only

  • Before purchasing a Medicare Supplement policy, be sure the agent has provided you with a four part outline of coverage including all available plans, premium, and benefits [CIC §10192.17(j)(1)&(2)].
  • You have a right to transfer to an equal or lesser Medicare Supplement plan during the 30 day open enrollment period commencing with your birth date. Insurance companies must advise you of this right at least 30 and no more than 60 days prior to your birth date [CIC §10192.11(h)].
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For Term Life Only

  • Any advertisement connected to the sale of Term Life insurance must prominently disclose any change in premium or benefits resulting from the aging of the insured [CIC §10127.8 (b)(4)&(5)].

You may contact the Department of Aging (HICAP) to obtain counseling on all health insurance issues including special Medicare Supplement open enrollment rights free of charge at 1(800) 434-0222.

The information provided herein is not all inclusive and does not negate or preempt existing California law. If you have questions or wish to discuss an insurance matter, the officers at our Consumer Hotline are available to help you. Please call them at 1(800) 927-HELP (4357) or Contact Us page.

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