Most people who want to buy term life insurance find a reputable financial advisor, talk to them about their specific needs, and then the advisor "shops around" the different carriers to try to find the least expensive but most complete term life insurance quote to protect your family in case you die suddenly. When financial advisors look at insurance companies, the location of the company usually doesn't affect the decision to buy. What matters is that the insurance company has a "A" rating and that the quote and policy for term insurance match your financial and lifestyle needs. But if you get insurance from a company in Boston, but you live in California, you might not get all the benefits that are only available in your state. Now, people who live in California can get a specific policy for term life insurance.
A Messy State
Whether you just moved to California or have lived here your whole life, you know how complicated the state is and what kind of people live here. The different kinds of term life insurance policies are just as confusing as the different kinds of people who live in California. The best thing to do is to find a financial advisor who can look at what each California term life insurance company has to offer.
Laws and rules about term life insurance in California
Each state has very different rules and laws about term life insurance. Some laws and rules in California say that people who want insurance have at least ten days to change their minds and get a full refund of all premiums paid toward a term life insurance policy after buying it. You have at least 10 days to change your mind, but many companies give you 30 days. This return policy gives people who aren't sure about the policy they chose a chance to try it out for free or more time to look for a better one. Visit http://www.equote.com/li/termlifeinsurance.html to learn more about term life insurance.
Aside from the free trial period, all California term life insurance claims should be settled within 30 days after the proof of death is given to the insurance company. If it takes the carrier longer than 30 days to pay out the benefit, interest may be added to the face value, which would also be paid to the beneficiaries.
Third, if the insured is late with a payment, there is a 30-day grace period. This is helpful because the policyholder doesn't have to worry that their California term life insurance policy will be cancelled if they forget to pay the bill. The grace period lets you know that your policy won't be cancelled without warning.
Last, if your licenced insurance company goes bankrupt or shuts down because its assets are less than its debts, the California Life and Health Insurance Guarantee Association will pay you if you lose your policy. A single death benefit can't pay out more than $250,000 per insured person or $100,000 in net cash. Even if a person has more than one policy, these limits still apply.
The California Life and Health Insurance Guarantee Association (CALIFEGA) will make sure you get paid if your insurer is licenced in California and your policy payments are up to date.
Laws in California about life insurance also keep insurance companies safe.
Since laws don't just protect people, there are also laws in California that protect insurance companies. People who have term life insurance in California must follow these rules.
First, term life insurance policies in California don't cover suicide for the first two years. If the insured person killed themselves, the insurance company would send the beneficiaries a full refund of all premiums paid in the past two years.
Second, a California term life insurance policy may not cover someone if they lie on their application or give false information about themselves. If this happens, the insurance company may or may not give back the premiums that were paid. This right is left up to each company on its own.
Third, insurance illustrations or financial projections are not allowed in some states, but they are in California. The state insurance department is in charge of making sure that the financial projections are accurate. Visit http://www.equote.com/li/californiatermlifeinsurance.html to learn more about California term life insurance.
As a California resident, you should check to see if a California term life insurance policy is better than one written by a company in another state.
