Posts tagged ‘insurance state laws’

Term Life Insurance State Laws Explained

When looking for life insurance, deciding on the right kind can be a confusing proposition.  Term life insurance is a policy that is taken out for a specific time period and only pays if the insured dies during this time, making it ideal for families with the financial commitments of young children and mortgages.  Term life insurance is also less expensive than whole life insurance. However, to make it even more difficult to determine if a term life insurance policy is the best policy for your future and your family, term life insurance policies vary by state. As a result of this, it is necessary to consider the laws relevant to your state.

Where to Find Term Life Insurance State Law Information

Because term life insurance state laws differ per state, a local insurance agent is the best source of information on the laws within the state they serve.  With the ease and increase of online insurance shopping though, it is often up to the consumer to educate themselves and make informed decisions based on the life insurance laws.  Determine if the company providing the quote is licensed to supply insurance in your state.  Each state offers information about state life insurance laws on their government insurance websites.  Reviewing these regulations before purchasing a policy is important to make sure you purchase a secure policy.

Term Life Insurance State Laws Explained Policy Differences

The most frequent difference between state life insurance laws is the time that is required to settle a policy before the insurance companies are required to pay interest.  Some states require insurance companies to pay a policy within 30 days of the paperwork being filed, while others may give up to two months.  A few states provide a grace period for late payments and most states give a ten day cancellation period for the insured to review the policy.  Other differences can be in cancellation policies or suicide policies.  Most states require that the premium be refunded if the policy is cancelled which is an important point to consider.

Exclusions in Term Life Insurance State Laws Explained

States regulate life insurance laws to prevent insurance companies and consumers from being taken advantage of.  Exclusions are put in place to prevent payouts on medical conditions that the consumer was previously aware of or to keep insurance companies from denying coverage based on age or ethnicity.  The state laws also place limits on the amount insurance companies can charge for coverage.  However, anytime legislation creates a situation in which the insurance companies are required to pay more, term life insurance premiums increase.

Because there are a number of different factors that can affect how term life insurance state laws can affect a policy, learning how they will affect your policy is crucial.  Term life insurance rates are determined based on age, sex and lifestyle using an annuity table.  However, state regulations also play a part in determining the rate quotes.  Understanding state laws can help you find better coverage, lower rates and help you avoid problems with future payouts, making your family safer and more secure during a difficult period.