If you are in the market for new life insurance coverage, or would like to find additional or less expensive coverage, here is some important information regarding your rights as a policyholder in Iowa.
Iowa Life Insurance Rules And Regulations
Life insurance in Iowa is regulated under Chapter 505, Title 8, Subtitle 1. These regulations help protect Iowa residents and spell out industry standards for insurance companies to follow.
The grace period in Iowa is 30 days, as it is in most states. This means that Iowa residents have 30 days in which to make up for a late premium payment, without losing their insurance. The policy can not lapse during this time, and if death of the insured occurs the insurance company is compelled to make a payout. The grace period is a nice feature that allows residents to keep their policies even if they are slightly late with a payment.
The free look period for Iowa is 10 days in length, which is a pretty standard length of time nation wide. The free look provides a “test drive” period where residents truly have 10 days to get a full look at their policy, with no financial commitment. While policy owners must pay the insurance company to bring their policy “in force”, if they wish to return their policy during the first 10 days after delivery the insurance company must return all premiums paid by the policy holder. It is illegal to charge any fees for having a policy “free looked”.
Guarantee of Death Benefit and Cash Value
Iowa is like many states, and provides a guarantee to policy owners through the Iowa Life and Health Insurance Guaranty Association. This guarantee will ensure that if an insurance company becomes bankrupt or insolvent, claims will be paid up to $300,000 per insured, and cash value will be reimbursed to policy owners up to $100,000 per person. This helps policy owners and beneficiaries trust that they will not lose all benefits from irresponsible behavior of financial firms.
All claims in Iowa are required by the state to be paid in a quick and timely manner. Iowa further pushes insurance companies to pay claims quickly by requiring any claim older than 30 days to be begin accruing interest paid by the insurance company. This leads to most claims being settled in Iowa within about a month of the claim being filed.
Iowa Insurance Division
Iowa Life & Health Insurance Guaranty Association
700 Walnut Street, Suite 1600
Des Moines, IA 50309-3899