South Carolina residents who are proud life insurance owners, beneficiaries, insureds, or residents thinking about purchasing new life insurance, here is a handy guide to your rights as defined by South Carolina lawmakers. Seeing a need for uniform minimums with regards to certain rights, Columbia legislators created a thick book of rules governing the operation of life insurance business. Life Ant has distilled the most important points, and voila, here is your handy reference guide for your rights as a policy holder.
South Carolina Rules And Regulations
Regulations and laws governing the rights of policy holders and the conduct of insurance companies are spelled out in Title 38 of the state Statutes. These laws primarily protect consumers, but also life insurance companies as well.
After receiving an insurance contract, owners of life insurance contracts may realize that the contract is long and wordy. Because it may be difficult for many consumers to understand each clause and rider at first glance, state lawmakers decided to provide consumers with extra time to review the contract. During this time, if the consumer decides that they do not want the contract, they may return it to the insurance company for a full refund. If an insured person dies during the free look, the company is still obligated to make death claim payouts. In South Carolina the free look period is 10 days, and 30 days if the policy is sent via mail.
The grace period is a length of time after a missed due premium payment, where the contract is not allowed to lapse. During this time if an insured dies and a valid claim is filed, the insurance company must make a full payment to the beneficiaries. In South Carolina the Grace period is one month.
Guarantee of Death Claims
South Carolina has a system in place to guarantee death claim payouts, up to a maximum of $300,000 per person. This would be needed if an insurance company were to become insolvent or declare bankruptcy and be unable to make claim payments. This guaranteed maximum is regardless of the number of policies outstanding or the size of those policies. The guarantee is provided through the South Carolina Life and Accident and Health Insurance Guaranty Association. We recommend that you always purchase your life insurer from a company with a strong financial rating and history.
South Carolina Life & Accident & Health Insurance Guaranty Association
PO Box 6
Silverstreet, SC 29145
Timely Claims Payouts
South Carolina requires that all claims are paid out in a timely manner. To add incentive for a company to pay claims quickly, if a claim takes longer than 30 days to be paid interest payments must also be paid with the claim. The calculated interest due is based upon the date of death. This provides reason enough for most claims to be paid in South Carolina within about a month of the company receiving the death certificate. An insurance company can also be subject to fines for not paying claims in a reasonable period of time.
South Carolina Department of Insurance