Mainers’ are a trusting people, and while this quality may be virtuous in social settings, for the life insurance industry it can mean a venerable feeding frenzy. Lucky for you Maine has rules in place to protect unscrupulous behavior of insurance companies. If you own life insurance, or if you are going to buy a new policy, here are some important rights that you need to know.
Maine Life Insurance Rules and Regulations
Maine protects it’s life insurance policy holders under Titles 24 and 24-A. These statues deal directly with life insurance and ensure that policy holders and insurance companies alike have a fair, equitable, and honest environment in which to conduct business. Life insurance may not be fun, but at least in Maine it’s honest thanks to the guardianship of the state.
The grace period in Maine is like most states in the country, providing 30 days after a missed payment where an insured is still covered. If an insured were to meet an untimely (or timely) demise during this period, the insurance company will still be obligated to pay a full death benefit to the beneficiaries. This means that a slightly late payment won’t cause anyone to miss out on the benefits of a life insurance claim. This has the duel effect of preventing a policy from lapsing due to a small oversight, and keeps policies in force for insureds after a late payment so future underwriting can be avoided as much as possible.
Free Look Period
The free look period in Maine varies depending on the insurance provider. There is no mandated free look by the state, however all major carriers offer this service as a show of good faith to consumers. If during the free look period a policy owner decides that he or she doesn’t want the policy after all, the life insurance policy can be returned to the insurance company for a full refund. This gives the policy owner time to look over all details of the policy and make sure that the coverage is appropriate for their needs.
Guaranteed Benefits In Case Of Insurance Company Failure
If an insurance company were to become bankrupt or insolvent, the Maine Life & Health Insurance Guaranty Association will cover your missed benefits to a certain extent. The limits on this fail safe are $300,000 in death benefits per insured person, and up to $100,000 in lost cash value per policy owner. Even this this guarantee, it is wise to only purchase life insurance from dependable providers, as many policies are larger or grow a larger cash value during the life of the policy. These limits also apply with no regard as to the number of policies outstanding or the size of the policies.
Timely Payment On All Claims
In Maine, the state does not want the insurance companies to sit on a death claim payout, earning interest on money that rightfully belongs to beneficiaries. To facilitate the timely payment of claims, Maine requires that all benefits are paid with no unreasonable delay. To delay for an “unreasonable” time would open insurance companies up to potential fines and sanctions from the state.
Maine Bureau of Insurance
Maine Life & Health Insurance Guaranty Association
PO Box 881
Boothbay Harbor, ME 04538