For those of you in the Granite State who are in the market to buy new life insurance, or to learn a little bit more about the policy you already own, here is an important guide to help you understand your rights. This information will allow you to get the most out of your life insurance policy.
New Hampshire Rules and Regulations
The laws governing the behavior of life insurance companies in the state of New Hampshire are written under Title 37 of the state Statutes. These laws contain some pertinent information for all policy holders.
The grace period in New Hampshire is mandated to be a minimum of no less than 30 days. While some companies may allow a longer period of time, most will allow the 30 day minimum. The grace period is a time where even if a premium payment becomes past due, the insurance company can not deny a claim if a death claim is filed. The policy is still in force during this time, and the policy owner can bring the policy back into good standing by making up the missed premium payment. The grace period helps prevent policies from lapsing easily, which would require new underwriting and will likely lead to higher premium cost than the older policy.
The free look period in New Hampshire is 10 days long as required by Title 37. During the free look period, a policy holder can decide to return their policy for a full refund, with no fees or penalties. This trial run is a way for owners of new policies to consider all the language in the contract, and decide if the policy fits their needs.
Guarantee of Death Payments and Cash Value
In New Hampshire the New Hampshire Life & Health Insurance Guaranty Association is there to provide payment to beneficiaries if an insurance company were to declare bankruptcy and is unable to make payments. While this safety net exists, there are limits to coverage. Total death benefits that will be guaranteed are $300,000 per person, and total cash surrender value that is protected is limited to $100,000. These limits prove why it is prudent to only purchase life insurance from companies with a strong financial standing, because many life insurance policies provide greater coverage than is guaranteed.
Like all states, New Hampshire requires insurance companies to make timely payments on all claims to the beneficiaries of a policy. Failure to pay in a reasonable time period can lead to fines, penalties, or other sanctions against the insurance company. If an insurance company takes longer than 30 days to pay a claim, interest must begin accruing on the claim amount. This means most claims are settled in New Hampshire in less than two months.
New Hampshire Insurance Department
New Hampshire Life & Health Insurance Guaranty Association
10 Chestnut Drive, Unit B
Bedford, NH 03110