California lawmakers approved a new life policy on Wednesday that would let individuals buy into policies covering catastrophic losses that will wipe out a person’s savings if the policies are not met.
The bill would allow individuals to purchase life insurance policies that cover losses from life-threatening events, such as a car crash or heart attack, even if the insured does not have insurance coverage.
It’s the first time California has allowed insurers to offer coverage for life-ending losses.
The state already has one such policy, which provides for coverage for $5,000 of loss from an auto crash.
The new policy would cost $10,000 for individuals and $20,000 per family.
California lawmakers approved the bill by a 5-3 vote.
They also gave final approval to a companion measure that would allow policyholders to purchase insurance policies for catastrophic losses from an injury or a heart attack.
Both measures would require that the policies cover all medical expenses.
California’s insurance commissioner, who is not yet in office, said in a statement that the new life policies will be “the most affordable options available to Californians.”
“Our goal is to help Californians save and thrive, and this legislation will provide relief to those struggling to make ends meet,” she said.
The state has a booming insurance market, with more than $2.3 trillion in annual claims.
The policy will be available to policyholders starting Jan. 1.