The insurance business in the state of Vermont is closely regulated under the Vermont Statutes’ Title 8. The codes therein outline the many provisions in place to benefit and protect the customer, and everyone who is considering the purchase of a Vermont term life insurance policy ought to become familiar with the general rules and regulations. Although many of them are universal to the United States, there may be slight differences that vary from state to state.
Vermont Free Look Period
Of the numerous provisions in place to protect buyers of Vermont term life insurance, the most basic is the free look period. Required by law of every Vermont insurance company, the free look period enables a new policy holder to decline the coverage for any reason. In this case, the insurance company is required to refund the buyer’s premium with no penalties. The time frame in which this is allowable varies from state to state, and lasts for a minumum of 10 days in the state of Vermont.
Vermont Grace Period
Sometimes a policy holder may not be able to pay the premiums on time, running the risk of the policy being canceled by the company. However, in the state of Vermont there is a grace period, required by law. During this period, the company may not cancel the policy and the coverage can go on uninterrupted as long as the policy holder can update the account within the allotted time. The grace period for a Vermont term life insurance policy holder lasts for 30 days.
Vermont Life and Disability Insurance Guarantee Association
Insurance companies in the state of Vermont are required to pay annual fees for the backing of the Vermont Life and Health Insurance Guarantee Association. This important association was put into place in order to allow policy holders some recourse in the case of the insurance company’s insolvency. There are a few restrictions on this protection, however, including the $300,000 limit on a lost death benefit and the fact that the insurance company must be licensed in Vermont for this to be of effect.
Vermont Term Life Insurance Settlements
There are also regulations regarding the length of time the insurance company may take to settle a Vermont term life insurance claim. Upon receiving the proof of death, a Vermont insurer will be obligated to settle the claim within 30 days. If the benefits are not paid in that amount of time, an interest rate of 12% will begin to accrue. By law, a detailed description of the company’s claim procedures will be included in your term life insurance policy.
As with any other important purchase, the decision to obtain a Vermont term life insurance policy is an involved one that should be gone over carefully. The law is on the side of the insurance buyer, with such provisions in place as the free look period, the grace period and protection from the Vermont Life and Health Insurance Guarantee Association, ensuring that a Vermont term life insurance policy can be purchased by anyone with little to no risk.