Illinois § 913

§ 913.

Life insurance. (a) Notwithstanding any other provision, the duties of a trustee with respect to acquiring or retaining as a trust asset a contract of insurance upon the life of the settlor, upon the lives of the settlor and the settlor's spouse, or upon the life of any person for which the trustee has an insurable interest in accordance with Section 113, do not include any of the following duties: (1) to determine whether any contract of life insurance in the trust, or to be acquired by the trust, is or remains a proper investment, including, without limitation, with respect to: (A) the type of insurance contract; (B) the quality of the insurance contract; (C) the quality of the insurance company; or (D) the investments held within the insurance contract; (2) to diversify the investment among different policies or insurers, among available asset classes, or within an insurance contract; (3) to inquire about or investigate into the health or financial condition of an insured; (4) to prevent the lapse of a life insurance contract if the trust does not receive contributions or hold other readily marketable assets to pay the life insurance contract premiums; or (5) to exercise any policy options, rights, or privileges available under any contract of life insurance in the trust, including any right to borrow the cash value or reserve of the policy, acquire a paid-up policy, or convert to a different policy. (b) The trustee is not liable to the beneficiaries of the trust, the beneficiaries of the contract of insurance, or to any other party for loss arising from the absence of these duties regarding insurance contracts under this Section. (c) This Section applies to an irrevocable trust created after the effective date of this Code or to a revocable trust that becomes irrevocable after the effective date of this Code. This Section applies to a trust established before the effective date of this Code if the trustee of a trust described under this Section notifies the settlor in writing that, unless the settlor provides written notice to the contrary to the trustee within 90 days of the trustee's notice, this Section applies to the trust effective as of the date of the trustee's written notice. This Section does not apply if, within 90 days of the trustee's notice, the settlor notifies the trustee in writing that this Section does not apply. If the settlor is deceased, then the trustee shall give notice to all of the legally competent current beneficiaries, and this Section applies to the trust unless the majority of the beneficiaries notify the trustee to the contrary in writing within 90 days of the trustee's notice. (Source: P.A. 101-48, eff. 1-1-20; 102-279, eff. 1-1-22; 102-558, eff. 8-20-21.)