Alabama Life Insurance

Alabama life insurance laws, like those in most states, affect policyholders primarily at the time of a claim. But it's still a good idea to familiarize yourself with Alabama life insurance law in order to make more informed coverage decisions.

This page:

  • Briefly describes Alabama life insurance regulations.

  • Explains the protection of the Alabama Guaranty Association.

  • Links to more information about life insurance in Alabama

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Alabama life insurance rights and regulations

The insurance industry in Alabama is regulated under Title 27 of the Code of Alabama. The state uses this code to regulate claims procedure and policy requirements in an effort to protect you, the consumer.

One such consumer protection is guaranteed by the "free look" provision that must be included in every life insurance policy. This provision allows you to change your mind about purchasing the insurance after even you've signed the policy.

Most companies allow you 10 days to do this, but you may have up to 30, depending on the insurer. If you decide against the coverage, the company must cancel the policy and return your premium without penalty.

Alabama also requires life insurance companies to allow a 30-day grace period on late payments. If you miss a payment, you have 30 days to bring the account current, and the company cannot cancel your policy during this time.

However, with consumer protections also come responsibilites. Life insurance companies have some protections against consumer deception.

For example, Alabama life insurance companies may contest statements you've made on your application for up to two years from the effective date of the policy. If they find any misstatements they can terminate the policy immediately.

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If you are ready to apply for an Alabama life insurance quote visit InsureMe now, and get quotes from agents in your area, who will help you design a policy that will fit your needs.

The Alabama Life Insurance Guaranty

Alabama life insurance policyholders are also protected by the Alabama Life and Disability Insurance Guaranty Association. This organization will help compensate you should your licensed insurance company become insolvent and your policy lost.

But there are restrictions. The amount of reimbursement for lost cash values may not exceed $100,000 per insured individual or $300,000 for all benefits including cash values. In cases where you own two policies totaling more than $300,000, you are only entitled to receive up to $300,000 in reimbursement.

Furthermore, an insurance company needs to be licensed in the state of Alabama in order for its policy holders to be covered by the association. For liscensing information, check with the Alabama Department of Insurance at (334) 241-4141.

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Apply for a quote with confidence at InsureMe (for Alabama term life insurance and whole life), or get a term life quote from Netquote. Your insurer will be licensed in Alabama.

Viatical settlements

Viatical settlements, which are purchasing agreements between on insured individual and a third party, are allowed and regulated in Alabama.

These agreements allow a third party to purchase a life insurance policy from the insured. The third party becomes both responsible for paying the premiums and the irrevocable beneficiary of the policy. Don't arrange a viatical settlement without the help of a licensed agent.

More AL life insurance help

If you want more help getting the best value on your AL life insurance policy, start with our guide to term life insurance or sign-up for our free life insurance course (see below).

To find out more about AL life insurance laws and regulations, visit the state's official website at the State of Alabama Department of Insurance.

For more help . . .

Getting the lowest possible premium on your life insurance is almost like an art form. There are many variables to consider, and to get the right balance of term length, benefit amounts, and policy riders and illustrations, you need to take a careful step-by-step approach to the buying process.

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