Life insurance company policies are regulated by each individual state, therefore the requirements and regulations between states can differ. Policyholders should be aware of the differences within their state. Some of the varying regulations in Louisiana may include the free-look period, the grace period and the amount that the amount that the Louisiana Life and Health Insurance Guaranty Association will cover. As a result, if you are looking at purchasing Louisiana term life insurance, this article will be helpful to you.
Louisiana Free Look Period
All insurance companies must adhere to the free-look period. The free-look period is the amount of time that a policy owner has to cancel a new life insurance policy without repercussion. The insured can cancel the policy for any reason during the free-look period and no penalties can be assessed. In addition, all paid premiums must be refunded in full. The free-look period in Louisiana is 10 days.
Louisiana Grace Period
The grace period provided to life insurance policyholders in Louisiana is 30 days. Policy owners have the protection of a grace period that allows them to make their premium payment within 30 days of the due date and still keep their plan current. Payments that are not made on time can cause a policy to lapse and be canceled, the grace period protects consumers from lapsing due to an unintentional late payment and gives them time to make the payment.
Louisiana Life and Health Insurance Guaranty Association
The added protection of the Louisiana Life and Health Insurance Guaranty Association brings peace of mind to life insurance policyholders. The Louisiana Life and Health Insurance Guaranty Association pay benefits in the event that an insurance company becomes insolvent and unable to honor its financial obligations. The association restricts the amount it will pay to a maximum death benefit of $300,000 or a maximum cash surrender of $100,000.
Louisiana Claims and Misrepresentations
In Louisiana all settlements must be completed within 60 days with proper documentation. An interest rate of 8% shall accrue until the claim is processed and settled. For the protection of life insurance companies against consumer fraud, all answers found on a life insurance application can be challenged for up to two years. Any misstatements of fraudulent answers can lead to policy termination. In most cases if the misrepresentation is age, the policy will not be canceled but will be recalculated to the correct age. Requests for medical records must be processed in a timely manner.
Life insurance policies may be similar, but each state has their own requirements that insurance companies must comply with. These regulations are important to residents who have life insurance policies and to those who are shopping for a life insurance plan. For new policies, verify the free-look period when applying. For all other active policies, know your grace period in case of a late payment. It is also important to know how the Louisiana Life and Health Insurance Guaranty Association will protect your policy. Honesty on a Louisiana term life insurance application is important to prevent the policy from being rescinded later.