If you are in the market to buy life insurance in Kentucky, or if you would like to purchase additional insurance, or maybe even replace an old policy, here is some important information regarding your life insurance rights.
Kentucky Life Insurance Rules and Regulations
In the good ole state of Kentucky, life insurance is a regulated industry. Specifically, the rules and regulations are spelled out under Title 25, Chapter 304. These rules are in place to make sure the life insurance industry operates orderly and honestly, and in good faith for all consumers.
The free look period in Kentucky is generally 10 days in length, though for a replacement policy an extra 20 days is given. This 10-30 day period, depending on your policy, is put in place to make sure that you understand the insurance contract that you purchased, and that you truly want to buy the insurance. During the free look period a policy owner may return the policy to the insurance company for a full refund, with no fear of any penalties or fees.
The grace period in Kentucky is 30 days long. A grace period begins when a policy owner misses a payment, and during this time even though the payment is late, the insurance company must keep a policy active. In the unfortunate even that an insured passes away during the free look period, the insurance company must still make a payout to the beneficiaries. If the missed payment is made up for by the owner, the policy resumes in good standing. There is no limit to the number of grace periods a policy may enter.
Kentucky Life and Health Insurance Guaranty Association
The Kentucky Life and Health Insurance Guaranty Association is there to provide a security blanket to policy holders in the event that an insurance company were to go bankrupt or insolvent. Kentucky will guarantee payments to beneficiaries of up to $300,000 per insured person, and will also guarantee cash value of up to $100,000 per owner. These limits are in place no matter how many policies are owned or how large they may be. For this reason we always recommend that only insurance companies with strong financial ratings are used as your insurance provider, especially for contracts over $300,000 in death benefit.
Kentucky Department of Insurance
Kentucky Life & Health Insurance Guaranty Association
4010 Dupont Circle, Suite 232
Louisville, KY 40207