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Proposed life insurance rule would help children of same-sex couples

Life Insurance and Annuities
by Scott Morrow
Liquidity in life insurance is useful in some situations.
Liquidity in life insurance is useful in some situations.

The life insurance industry has seen a variety of new regulations over the past several years, and several new ones are in the process of being adopted over the next few years. One new rule, recently advanced by the Obama administration, would extend insurance coverage to the children of same-sex couples working for the federal government.

The U.S. Office of Personnel Management (OPM) recently proposed that gay federal employees with children should be able to obtain life insurance for those young people, even if they live and work in states where same-sex marriage is not yet recognized, according to a report from the political news blog The Hill. This change to federal rules would, at this point, only apply to coverage obtained through the Federal Employees' Group Life Insurance Program, and would be specific to covering the children of same-sex partners, which were then brought into the relationship.

There would be other rules as well, such as those to continue denying coverage to children of a federal worker's partner, as long as they live in a state where gay marriage is legal, but they remain unmarried, the report said. Subsequent changing circumstances would not necessarily have to be revisited if their situations change again.

A difficult road?
In announcing these proposed changes to federal rules, the OPM noted that it understands the legal complications that could come with the alterations to existing rules, the report said. For instance, couples that meet in a state where they cannot get married, but later relocate to one where they can, may create issues under these proposed rules that would have to be addressed. And further, given the pace at which gay marriage is being adopted nationwide, states where couples have lived for a long time could allow them to marry at some point in the future, which likewise would probably require new rules to be issued. Nevertheless, the public has 60 days to comment on the current proposed rule before it will be finally considered.

While this law only affects the Federal Employees Group Life Insurance Program, it is important for life insurance companies to continue looking for potential new markets for selling their life products.  The more insurance companies can do to attract consumers of all backgrounds by having greater flexibility with the insurance coverage they offer and who they market to, the more likely they might be to actually see an increase in customers.



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