Vermont Life Insurance
- Vermont life insurance laws create industry standards, ensure fairness and protect consumers. Know your rights under Vermont law before shopping for a policy.
Life insurance benefits provide protection for 90 million U.S. families. In Vermont alone, that translates to about $3.6 million in benefits paid every day. Because regulations are state specific, it's important to understand your rights under Vermont life insurance law before purchasing a policy. See how the state protects consumers and where you can go for help.
Vermont Life Insurance Rules and Specifics
Vermont life insurance is governed by the laws found in Title 8 of the Vermont Statutes. These laws, which are designed to protect consumers from illegal or unfair business practices, are enforced by the Vermont Department of Financial Regulation. The department licenses and regulates Vermont companies that sell life insurance and may authorize new insurers to do business in the state.
Title 8 laws cover all aspects of the industry, including consumer protections such as:
- A policy review period: Vermont policyholders may cancel coverage within the first 10 days without being penalized. This "first look" period gives policyholders a chance to review their coverage terms and cancel their plan for any reason. The insurer must issue a full refund.
- A late payment grace period: Vermont mandates a 30-day minimum grace period for policyholders who've missed a premium payment. Coverage remains active during the period, and beneficiaries are entitled to a payout if the insured passes away. If a premium payment isn't made within 30 days, the company may legally terminate benefits.
- Guaranteed death benefits in cases of insolvency: If a state-licensed insurer goes out of business, Vermont's guaranty association provides continuing coverage for up to $300,000 of death benefits per person. Coverage may continue through the guaranty association or a financially stable member company or a replacement policy may be issued.
- Timely benefit payout: Vermont gives insurers up to 45 days to pay out benefits after a claim is filed. If the company fails to make a timely payment, the beneficiary is due interest in addition to the benefit.
Life Insurance Resources in Vermont
Whether you're a policyholder, a shopper or the named beneficiary on a loved one's policy, you may have questions or concerns. If you have a coverage question or need help solving a problem, several resources are available:
- The Vermont Department of Financial Regulation: Vermont consumers may seek information and assistance through the DFR. Its website features an online complaint report form and a license verification tool.
- The Vermont Office of the State Treasurer: Funds from unclaimed policies may be turned over to the state. Consumers who think they may be beneficiaries of unclaimed policies may visit the state treasurer's website to search for unclaimed property. The website also provides links to several lost policy locator services.
- The Vermont Life & Health Insurance Guaranty Association: Consumers who've been impacted by a company's insolvency may contact the state's guaranty association directly for information and next steps.