CA AB1209

Prohibits insurers from denying or limiting policy loans and cash withdrawals on life insurance policies issued after January 1, 2021 that contain long-term care benefits, except for pro rata reductions in cash value or liens related to accelerated death benefit payments.

Requires insurers to provide policyholders with detailed statements at least 30 days before the first accelerated death benefit payment and within 30 days after each payment, including explanations of policy changes and warnings about tax and government benefit implications.

Requires insurers to provide policyholders with comprehensive information before approving loans or withdrawals from policies with long-term care benefits, including warnings about potential policy lapse and effects on death benefits and long-term care benefits.

Mandates that universal life insurance policies with long-term care coverage include a signed disclosure explaining the risk of policy lapse and offering protection options, to be completed by both the applicant and agent.

Prohibits the Insurance Commissioner from approving initial premium rate schedules for long-term care insurance that include scheduled rate increases based on the insured's attained age or policy duration, effective January 1, 2021.