For residents of New Mexico in the market to purchase a new life insurance policy, or for residents who currently own insurance and would like to learn a little bit more about their rights as life insurance owners, here is a handy reference guide that boils down the most pertinent information you most need to know.
New Mexico Rules and Regulations
Life insurance laws are stated under Chapters 59 and 59A in the state Statues. These laws deal directly with standardizing fair behavior amongst insurance companies with regards to their business practices.
The period of time after a new life insurance policy is delivered to the customer, and the policy can still be returned for a full refund of all premiums, is known as the free look period. The free look period in New Mexico is not mandated by the state, and therefore can vary significantly amongst different companies. While the free look is not a requirement of life insurance providers, most do allow a free look period as a service to their policy holders. Beware that not all companies necessarily will provide the free look. If a company does have a free look period in New Mexico, they must apply the policy fairly and equally amongst all policy holders.
Most life insurance companies in New Mexico provide a 31 day grace period to their clients. The grace period can truly be a saving grace for beneficiaries of policies that are “in arrears”. The grace period allows a period of time after a missed premium payment, where if an insured person dies and a valid death claim is filed, the insurance company must still pay the claim. This also allows policy holders time to bring their policy back into good standing with the insurance company without needing to seek new coverage for being late with payments. There are no limits to the amount times a policy can go into grace period.
Guarantee Of Death Benefits and Cash Value
As a service to policy holders of insurance companies that become bankrupt or insolvent, New Mexico will guarantee an amount up to $300,000 of death benefit, and $100,000 of lost cash surrender value per person. This guarantee is provided by the New Mexico Life Insurance Guaranty Association and extends coverage to residents of New Mexico only. Beware that the limits are per person, and are regardless of the number of policies a person may have, or the size of the coverage. At Life Ant to prevent beneficiaries from being short changed by insolvent insurance companies, we recommend that you only purchase your insurance from companies with high financial ratings.
New Mexico Life Insurance Guaranty Association
PO Box 2880
Santa Fe, NM 87504-2880
Timely Payment Of Claims
New Mexico believes that all residents deserve their claim payouts in a timely manner. Because of this, New Mexico takes the step of spelling out an exact amount of time a claim must be settled in. 60 days is the stated maximum amount of time an insurance company can take before being subject to fines or penalties. For this reason, most claims are settled very quickly, usually within about a month.
New Mexico PRC Division of Insurance