Alabama Life Insurance
- Learn about your rights under the laws governing Alabama life insurance. Discover resources that can help you choose a policy and file complaints in the state.
Many types of life insurance are available throughout the United States, but state laws determine the specific features of policies. If you're shopping for life insurance in Alabama or already have a policy, knowing the state's insurance regulations can ensure you receive fair treatment in the event of a dispute with your insurance company.
Alabama Life Insurance Rules and Specifics
Title 27 of the Code of Alabama establishes the laws governing insurers who operate in the state. Under its rules and regulations, all insurance policies in Alabama must:
- Provide a free look period. An insurance company must let you cancel your policy and return any paid premiums if you cancel it within 10 days of receiving your policy information from the insurer. Companies are free to offer longer free look periods.
- Give you a grace period. After you make your initial premium payment, an insurance company must give you a grace period after the due dates of your payments. As long as you make your payment before the end of the period, the company can't cancel your policy. The mandatory grace period for flexible premium universal life policies is 60 days. All other types of policies must include a minimum 30-day grace period.
- Limit the length of contestability periods. After you have had your life insurance policy for two years, an insurance company can't deny standard death benefit claims based on an investigation into errors or misrepresentations.
- Set rates on policy loans within certain limits. If you borrow against your insurance policy, the life insurance company can charge a maximum of 8% annual interest or establish a variable rate with a disclosed maximum that changes less frequently than once every three months.
Life Insurance Resources in Alabama
As a resident of Alabama, you have access to assistance through government agencies and nonprofit organizations.
- Alabama Department of Insurance (ALDOI): The governing agency for life insurance in Alabama ALDOI provides free information about life insurance for consumers and handles complaints involving insurance companies.
- Alabama Life & Disability Insurance Guaranty Association: Every life insurance company licensed to sell policies in Alabama must join this association. In the event that any member company experiences financial trouble, the association protects your interests and ensures that you still receive payment for claims up to set limits.
- Alabama Office of the Attorney General: Alabama Attorney General's office can assist you in the event of life insurance data breaches that expose your personal information. You can also file consumer protection complaints about companies through the office.
- Alabama Department of Senior Services. Older adults can receive free insurance counseling through this government agency.
- Legal Services Alabama: Legal Services Alabama and the Legal Services Corporation cosponsor this website where you can seek free help from an attorney to assist with a wide range of issues, including life insurance.