California Life Insurance
- Understand the rules and regulations of life insurance in California. With the right information, you can make smart decisions about your future life insurance purchases.
Life insurance can be an essential part of financial planning for many people. Those with families may find they rest easier knowing their loved ones will have financial support if the worst happens. There are also life insurance options that let you save money for the future. It may seem like life insurance is the same everywhere, but each state has different regulations that govern the industry. If you’re thinking of purchasing life insurance in California, you should take the time to do research into the rules so you can make the smartest decision about life insurance products.
California Life Insurance Rules and Specifics
The California Department of Insurance regulates the insurance agency in the state, and the regulations are laid out in the California Insurance Code.
California pays particular attention to people changing or replacing their life insurance policies. There are specific requirements in place for insurers and agents who are proposing a change:
- Agents must provide consumers with the original or a copy of all printed materials used in a presentation suggesting a change of policy.
- When recommending changes, agents can’t use inaccurate comparisons to the existing policy.
- Agents can’t recommend that an insured person aged 65 or older purchase an unnecessary replacement policy.
- Insurers must provide a buyer’s guide to applicants before accepting a person's initial premium.
- Individual life insurance policies must have a cancellation period of between 10 and 30 days; for people aged 65 and over, the cancellation period can’t be less than 30 days.
California also protects consumers if insurance companies go out of business. The law states that 80% of the policy is guaranteed; however there are a lot of other rules and limitations around this figure. This includes an upper limit on the amount that can be provided.
Life Insurance Resources in California
California Department of Insurance
The California Department of Insurance is the first point of contact for information about life insurance in California. The agency’s website has a Life Insurance Guide for consumers considering a purchase of life insurance. There’s also a hotline where trained staff can answer questions about all types of insurance. The hotline can be reached at (800) 927-4357.
California Life & Health Insurance Guarantee Association
The California Life & Health Insurance Guarantee Association is dedicated to helping policyholders when an insurance company becomes insolvent. It has information about what to do in case your insurer goes out of business and how to determine if your policy is covered by California’s life insurance guarantee.