The death of a loved one can be the most difficult time a family is forced to struggle with. In some cases, a family may be too distraught to deal with handling a large sum of money derived from a life insurance policy.
Instead of receiving life insurance funds in a lump sum, some individuals opt for a Retained Asset Account. Such an account is a temporary fund for beneficiaries to consider.
New Jersey Department of Banking and Insurance commissioner Tom Considine is now requiring insurers to provide greater disclosures for beneficiaries.
"I believe we should consider this adjustment to guaranty coverage as a means of eliminating any possible disadvantage to consumers," says Considine. "RAA funds are sometimes said to be 'as good as cash.' Removing the credit risk through added guaranty fund coverage makes this so."
Considine also says that the increased regulations will help provide beneficiaries with the safety and security they need when dealing with difficult circumstances.
When suddenly receiving a large sum of money, it's important for families to carefully manage such funds to ensure they reap all the intended benefits from the policy.