FAQs About Life Insurance
The Department of Insurance has developed a list of frequently asked questions regarding life insurance.
Frequently Asked Questions (FAQs)
“Free look” is the period of time following policy delivery in which the applicant can return the policy for a full refund of premium. This period is a minimum 10-day “free look” period on new policies and a minimum 20 day “free look” period on replacement policies.
Life insurance contracts may be voided within the first two years (the “incontestability period”) if the applicant provides incorrect answers to the application questions and the company’s decision to issue the policy was based on the misrepresentations. Always verify that answers and information submitted on any application for insurance is complete and accurate.
Generally, a life insurance policy limits death benefits to the amount of premiums paid if the insured person commits suicide during the first two years. After the initial two years, the benefits should not be affected.
No. The laws and regulations of the state of issue apply. North Carolina law applies only to policies applied for and issued in North Carolina.
North Carolina law, GS 58-58-110 requires insurance companies to pay interest if the death proceeds are not paid in accordance with the terms of the policy within 30 days after the receipt of satisfactory proof of loss.
The policy owner has full legal right to all policy values and to make policy changes during the lifetime of the insured.
The named beneficiary is entitled to receive death proceeds upon the death of the insured person.