Posts tagged ‘Nevada insurance regulations’

Nevada Term Life Insurance Information

Term life insurance is state mandated.  Because of this, it is important to understand the differences when owning or purchasing a Nevada term life insurance policy.  While every state requires a free-look period to give policy holders time to review the documents, this time period can be different state by state.  The payment grace period before a policy can lapse can also be different for each state.  In addition, the Nevada Life and Disability Guaranty Association has specific restrictions that affect policy holders.

Nevada Free Look Period

The free-look policy period is put in place for Nevada term life insurance policies to protect the consumer.  This allows consumers time to review the policy and determine if the policy includes in writing any terms that they were promised.  Nevada term life insurance gives a 10 day free-look period.  During this time the policy holder can cancel the policy for any reason and receive a complete refund of any application fees or premiums paid with no penalties applied.  This also allows consumers who receive policy approval at a higher rate due to medical conditions the time to reject the policy if desired.

Nevada Grace Period

The Nevada term life insurance grace period allows consumers the security of knowing that if an insurance policy is not paid by the due date, they still have a grace period before the policy is cancelled.  The grace period in Nevada is 30 days.  However, the insurer has the right to impose an interest charge of up to 6 percent per annum for each day of grace that elapses before the payment is made.  If a claim is submitted while the policy is in the grace period, any amount of the premium and interest that is due will be deducted from the policy proceeds.

Nevada Life and Disability Insurance Guaranty Association

When a Nevada term life insurance policy is underwritten by a licensed insurance company, the investment is protected by the Nevada Life Insurance Guaranty Association.  If the insurance company is incapable of paying on a policy due to bankruptcy, the Nevada Guaranty Association will cover the some of the loss.  The total amount that can be compensated is restricted though.  Death benefits are limited to $300,000 and cash values cannot exceed $100,000.  To determine if an insurance company is backed by the Nevada Life and Disability Insurance Guaranty Association, consumers should check the state’s insurance division.

Nevada Term Life Insurance Laws and Regulations

Nevada term life insurance laws also protect insurance companies by providing them with a two-year “contestability clause.”  This clause allows insurance companies to investigate a policyholder to determine if they have misrepresented themselves or if they have committed fraud.  They have up to two years to review the application, even if the policy holder has already been approved.  If there has been any deceit, the policy can be cancelled.  In the case of the wrong age being input, the policy may not be terminated entirely, but the policy rate may be adjusted.

Term life insurance laws are similar from state to state, but an informed consumer should always be aware of the slight differences in their state.  The free-look policy protects consumers and provides them with the time to review policies and cancel them for any reason with no penalties.  Grace periods give policy holders extra time to bring their account current before cancellation.  Nevada term life insurance also provides a guarantee for consumers in the event of an insurance company’s insolvency.