It would be wise for Utah residents to educate themselves on how life insurance works in their state before going off and signing a policy. Life insurance in Utah, as it is in the rest of the country, is regulated on the state level. This means that life insurance laws in Utah will be vastly different than those of any other state in the country. Continue reading below to learn more about these laws and what they can mean for you.
Life Insurance Rules And Regulations In Utah
The Utah Code (Title 31A, to be exact), is the prime regulatory force for life insurance in the state. The code seeks to protect consumers and providers of life insurance in Utah. If you read it, you will learn about life insurance policy requirements, standards for claim procedures, etc. While you can read open up the Utah Code and study the laws yourself, we thought it would be beneficial for us to highlight some of the key points of the code for your ease and convenience.
Free Look Period In Utah
In stat state of Utah, there is no “free look period” required by law. Most states in the country require life insurance providers to allow their new policyholders a trial period in which they can back out of their policy at any time for a full refund. This period of time, usually between one and two weeks, is known as the free look period. Unfortunately for Utah residents, there is no free look period legally required in the state. Check with your life insurance company, though. Many providers have company policies which still allow their customers the right to a free look period.
Late Payment Grace Period In Utah
One consumer protection law in the state of Utah is known as the “grace period”. In Utah, life insurance policyholders are given 30 days to make up for a late payment on their life insurance premium before their policy can legally be terminated. This grace period ensures that life insurance polices cannot be canceled in Utah due to reasonably late payments. During this 30 day period, there should be no interruption in service, and all coverage will continue as normal as soon as the payment is made.
Claim Payments In Utah
The state of Utah allows each life insurance company in the state freedom to set its own policies on claim payment procedure. Check with your life insurer to see what their policy is for timeliness of claim payments. While there is no statewide provision like in other states that say claims must be paid within 30 or 60 days, most companies still have policies with will not allow for claim payments to drag on.
Consumer Misrepresentation In Utah
In the event of discovery of misrepresentation on a life insurance policy or application, life insurers in Utah are allowed to cancel the policy. The life insurance provider must find the misrepresentation within the first two years of the signing of the policy in order for it to be eligible for termination. If the policy is canceled due to misrepresentation, the insurer will not be obligated to make payment on any claims or benefits.
If the misrepresentation is found out to have been by mistake, such as an accidental error on the policy, the policy will simply be cancelled. If the misrepresentation was done purpose, such as lying about medical history, the policyholder could be prosecuted for fraud.
For more information on the life insurance rules and regulations in the state of Utah, please contact:
Utah Insurance Department
Utah State Guaranty
If your life insurance provider in the state of Utah goes out of business, your policy will still be backed by the Utah Life And Disability Insurance Guaranty Association. This organization was established in order to protect consumers, like yourself, from losing their investment due to insurance company insolvency. In order to qualify for this backing, you must be up to date on your premium payments, and your insurer must have been legally licensed to sell life insurance in the state of Utah.
The Utah Life And Disability Insurance Guaranty Association will compensate you for up to $300,000 in lost death benefits and up to $100,000 in lost cash surrender. These limits are the maximum allowed for a single life. Even if the deceased was insured for a larger amount, or covered by multiply policies, you will still only be protected for up to 300,000/100,000. For more information, please contact the association at:
Utah Life & Health Insurance Guaranty Association
60 East South Temple, Suite 500
Salt Lake City, UT 84111