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Nebraska changes law to make life insurance access easier

For years, the focus for many in federal and state government agencies has been on trying to put more restraints on the life insurance industry. However, that may be shifting now, as more experts extol the virtues of this type of coverage and lawmakers move to improve the kind of access consumers have to it.

One very specific type of life insurance - known as funeral life insurance - will soon be just a little bit easier for consumers to buy in the state of Nebraska, according to a report from the Omaha World-Herald. As the name implies, this type of coverage specifically pays for the costs of funeral arrangements, and are often better than other financial options consumers have when it comes to paying for funerary services and related costs.

What's the change? Beginning on Aug. 30, a Nebraska law goes into effect that reduces the amount of training and education funeral directors and those in the industry need to obtain licenses to sell this type of insurance, the report said. As a result, the state expects that the number of people who can sell this type of coverage will increase by as much as 25 percent. When that happens, Nebraska will be among the 16 or so states that have passed similar rules.

The problem for the life insurance industry in general is that, prior to these rules, these professionals in the funeral industry were required to have the same type of training as regular life insurance agents, which struck many as overkill, the report said. This kind of coverage is relatively inexpensive because it only pays out about $10,000 - and sometimes less - if a person dies, and is also so "niche," according to an executive at a company that sells this type of plan, that full-on training isn't really relevant to their jobs.

Why that's important Lawmakers in the state clearly agreed with that sentiment, and now allow for the designation of "limited lines" for people selling only lower-value policies such as these, the report said. In addition, the state's Insurance Department is also in charge of licensing these salesmen.

The law also frees up those in the funeral industry to pursue their careers more fully, the report said. Prior to this law being passed, they had to spend 21 hours every two years taking continuing education courses that didn't have much to do with their field, in addition to the classes required to maintain their licenses as funeral directors. Those requirements were often a drag on their businesses. This law reduces the insurance education component of the requirements from that 21 hours to just three.

Of course, this kind of financial tool may not be right for everyone, but giving consumers better access to it will likely go a long way toward helping them to fully investigate all the options available, and consequently make the most informed decision.

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