Life Insurance Laws

State laws and statutes govern life insurance and these regulations vary from state to state.  Some rules protect consumer interests while others protect insurers.  Here are some examples of these state regulations:

• A grace period, typically 30 days, during which a policy cannot be cancelled due to late payment of the premium
• A free-look period, typically 10 days, during which buyers can change their minds about their new policy and get a full refund of their premiums
• Death benefits must be paid in a timely manner, typically within 60 days of proof of death, and interest may begin accruing on the death benefit after that timeframe
• Insurance companies are exempt from paying claims during the first two years if the death was suicide
• Insurance companies may challenge statements made on life insurance applications for up to two years from the policy effective date

When consumers need to file life insurance lawsuits

With all the regulations associated with life insurance law, why do some consumers still find themselves embroiled in a life insurance dispute or needing to file a life insurance lawsuit?  The following are some of the problems life insurance consumers encounter:

• The insurer fails to pay death benefits in a timely manner or otherwise violates the life insurance law
• Unethical conduct by agents, such as persuading people to buy expensive products or make policy exchanges that are not right for them
• High-pressure or misleading marketing and sales presentations and claims by insurers or agents

Buyer beware is the best advice

Unsuspecting consumers can be easily confused or misled about the type of life insurance they are buying.  While term life insurance is straightforward, variable life insurance combines life insurance with investment in securities, potentially putting your investment at risk.  Since variable life insurance products are securities, the insurers must follow the regulations of the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

With the new health care reform law, criminals are also taking advantage of consumers by offering illegal or outrageous health insurance products.  Since many citizens are still learning what the Patient Protection and Affordable Care Act (PPACA) covers, they are vulnerable to misinformation by scammers.

Whether you are buying a life or health insurance product, you must understand the terms, benefits, and risks of the deal.  Conduct independent research and comparison shop before making a decision.

If you are facing an insurance dispute or lost money due to illegal or unethical insurance business practices, Parry, Deering, Futscher & Sparks, PSC is a nationwide firm with skilled life insurance lawyers that are well positioned to help you.  We have an impressive track record of settlements achieved through individual or class action litigation we conducted on behalf of our clients.

Trust us to help

If you or a loved one needs legal counsel related to life and health insurance law, contact the life insurance attorneys at Parry, Deering, Futscher & Sparks, PSC online or in Kentucky at (859)291-9000 for representation in individual and class action litigation.