Maryland residents looking to purchase life insurance need to know a few things about the life insurance situation in the state. In the United States, life insurance is regulated on the state-level (as opposed to the federal-level), which means that each state has it’s own set of rules and regulations that consumers need to be made aware of.
Life Insurance Rules And Consumer Rights In Maryland
The life insurance industry in the state of Maryland is regulated by the Code of Maryland Regulations (Title 31, to be exact). You can view the code yourself and study the legal jargon (if you would like), but we have decided to make it easier for our visitors by reviewing the key points of the code below.
Free Look Laws
The state of Maryland allows for life insurance policyholders to cancel their policy within 10 days of purchasing it and still get a full refund. This law allows for consumers to examine the policy thoroughly for up to ten days. If they do not like what they see, they can cancel it and get a full refund. “It is a good piece of consumer protection,” says Jack Dolan from the American Council of Life Insurers.
Grace Period Laws
Maryland life insurance policyholders will not have their policy terminated immediately in the event that they miss payment on their insurance bill. Instead, they are given a 30 day grace period which allows them to “make good” on their late bill payment without having their policy canceled. This allows for accidental late payments, payments lost in the mail, etc.
Timely Claim Payment Laws
Once a claim is made, insurers in Maryland have 30 days to make payment on that claim. Once the insurance provider receives proof of death, they are only given 30 days to pay the benefit to the beneficiary. If they are late paying the beneficiary, they will be penalized and the account of the beneficiary will accrue interest.
For more information regarding life insurance laws and consumer rights in the state of Maryland, please contact:
Maryland Insurance Administration
State Insurance Guaranty
In Maryland, if your life insurance provider goes out of business before paying your claim, don’t worry, you’re covered. All life insurance policies in the state are backed by the Maryland Life and Health Insurance Guaranty Association for up to $300,000 in death benefits.
In order to collect on this benefit, your previous insurer must have been legally licensed with state of Maryland and you must be up-to-date on your insurance bill payments.
The contact information for the Maryland Life and Health Insurance Guaranty Association is as followed:
9199 Reisterstown Road, Suite 216 C
Owings Mills, MD 21117