Posts tagged ‘North Carolina insurance regulations’

North Carolina Term Life Insurance Information

In North Carolina, there are subtle differences in term life insurance laws from other states.  For instance, while all states require a free-look period for life insurance, the time required can be different.  The free-look period allows consumers a period of time in which they can cancel their policies with no repercussions.  The payment grace period before a policy can lapse can also be different for each state.  Also, in North Carolina, the North Carolina and Disability Guaranty Association gives policy holders a limited guarantee that their policies will be paid.

North Carolina Free Look Period

In North Carolina term life insurance; there is a free-look period for consumers that allow them 10 days to review a term life insurance policy.  This allows the consumer time to determine if the policy is the best fit for their needs and if the agreed upon terms are in the policy.  During the grace period, the policy holder has the right to change their mind and decline the coverage.  Once the policy is cancelled, there must be a full refund of all premiums and application fees with no penalties.

North Carolina Grace Period

North Carolina term life insurance laws requires a one month grace period for all policy holders on late payments.  The insurance company cannot terminate a policy if the payment is received within 31 days of the due date.  This gives the policy holder the added insurance of knowing that if a payment is delayed their policy will not be cancelled.  If the policy is not paid during this period, the insurance company will have the right to cancel the policy.  There are often provisions for reinstatement however, which may require additional fees or requirements.

North Carolina Life and Disability Insurance Guaranty Association

The North Carolina Life and Health Insurance Guaranty Association was created to protect policy holders in the event that an insurance company became insolvent and ordered liquidated by the courts.  This association is comprised of insurance companies licensed to sell life, health and accident insurance within the state of North Carolina.  If the insurance company is unable to pay it’s policy holders, the North Carolina Life and Health Insurance Guaranty Association will provide death and cash benefits up to $300,000.

North Carolina Term Life Insurance Laws and Regulations

For the first two years of a policy’s life, suicides are not eligible for death benefits.  In addition, a North Carolina term life insurance company has two years to examine the policy to determine if there are any inaccuracies.  Any incorrect statements can lead to a policy’s termination with all premium payments refunded.  This state law provides the insurance companies with protection against insurance fraud.  If the discrepancy is an age error, the policy may be revised using the correct premium rate.

North Carolina term life insurance laws and regulations are similar to other states.  However, state mandate differences are important to know.  With the free-look policy, consumers are protected with a defined period of time to review their policies.  During this period they can cancel them for any reason with no penalties.  Grace periods also give policy holders extra time to bring their account current before insurance cancellation.  In addition, the North Carolina Life and Health Guaranty Association protects policy holder’s investments.