The United States federal government has not established an agency to regulate the sale of life insurance. Rather, rules relating to the licensing of life insurance agents and the regulation of life insurance policies are overseen by each respective state.
Regardless of which state you reside in, there are two types of life insurance from which to choose: Term life insurance and Permanent life insurance.
Often people wonder why they need life insurance, when they have never experienced a serious health problem and they do not work in a hazardous environment or frequently participate in dangerous activities. Unfortunately, statistics have proven that the leading killers of adults in the United States are heart disease, cancer and accidents, all causes which are generally unpredictable and can happen to just about anyone.
While every state has a department, which oversees insurance matters, including the sale of life insurance within that respective state, Departments of Insurance do not monitor life insurance as heavily as health or auto insurances. In fact, it is rare to find any state regulation that requires specific life insurance coverages, or mandates how a policy should be worded or priced. Any state regulations that do exist typically take effect when a life insurance claim is filed, and most concern the payment terms and related issues regarding the payment of death benefits.
There are some differences from state to state among regulations regarding free-look timeframes, illustration requirements, underwriting, and medical examinations. You must keep these differences in mind as you shop for life insurance. More information about state-specific rules and resources can be found using our Life Insurance by State links.
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