Term life insurance is an affordable fixed rate insurance plan that many people in the United States have a need for. However, term life insurance laws in each state may be the same in many areas, but can vary slightly. For residents of South Dakota who are considering the possibility of obtaining a South Dakota term life insurance policy, there is important information that should be learned about the state’s rules and regulations.
South Dakota Free Look and Grace Period
Among the many regulations put into place by the state of South Dakota on behalf of the insured is the 10 day free look period. This allows the new policy holder time to understand the policy and decline coverage during this time while receiving a full refund. Depending on the individual insurer, this period may be as long as 30 days. In addition to this, there is also a grace period extended to individuals who owe premiums. This period is for a period of 30 days or 4 weeks and prevents the policy from being cancelled during this time.
South Dakota Life and Disability Insurance Guarantee Association
The holder of a South Dakota term life insurance policy should be aware that there exists an organization to protect the insured in the case of insurer’s insolvency: the South Dakota Life and Health Insurance Guarantee Association. This organization is in place for the protection of the individual policy holder, although there are a few restrictions involved. For example, there is a limit of $300,000 per individual payout in the case of lost death benefits.
South Dakota Policy Holder Privacy
Privacy is important to everyone, and there are laws in place to ensure that every policy holder’s personal information is safely maintained by insurance companies. The company may never disclose any medical information to anyone else, although they are required to release the policy holder’s own information at their request. This is important information to know for every holder of a South Dakota term life insurance policy, as well as potential buyers.
South Dakota Insurer’s Protection
In many cases, the law is on the side of the South Dakota term life insurance policy holder. However, it is important to maintain honesty in claims, as the company has its own protections in place for customer misrepresentations and dishonesty. In such cases, the policy can legally be canceled, relieving the company of obligations to honor any of the claims or give any refunds. In addition to this, insurance companies are also exempt from paying claims on a death by suicide within two years of start of the policy.
Additional South Dakota Life Insurance Facts
South Dakota insurance companies are obligated to pay out benefits within 2 months once they have received the death certificate. Some companies may add interest on the policy if the payout exceeds 2 months but this is not a state requirement. Viatical settlements are allowed in state of South Dakota which allows third parties to buy the insurance policy from the insured (paying premiums), who will then become the beneficiary.
With such provisions in place as the free look trial, the grace period and the South Dakota Life and Health Insurance Guarantee Association, those who hold a South Dakota term life insurance policy or those who are considering purchasing one may rest assured that they can make the decision safely and with minimal risk.