Illinois Life Insurance
Illinois life insurance laws deal primarily with claims issues. However, familiarizing yourself with some basic regulations is still key to making wise coverage decisions.
This page:
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Briefly describes Illinois life insurance regulations.
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Explains the protection of the Illinois Guaranty Association.
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Links to more information about life insurance in Illinois
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Illinois life insurance rights and regulations
The insurance industry in the State of Illinois is regulated under Act 5 of the Illinois Insurance Code. Under these codes, claims procedures and policy requirements are overseen by the state in order to protect you, the consumer.
One such protection is guaranteed by the ten-day "free look" period included in every life insurance policy. During this window, a new policyholder can change her mind about the coverage and still receive a full refund of paid premiums.
A policyholder is also entitled have her medical records disclosed to a physician of her choice, if requested. (Insurers are not, however, obligated to release these records to the insured.)
Once a claim has been made, insurers are allowed 30 days (after receipt of medical records and proof of death) to deny or pay it. Benefits will begin to accrue interest during any time over this deadline.
And, while there are no specific claim procedures mandated by the state, there are improper claim practices ruled unacceptable, (as outlined in 50 IL Adm Code 919).
However, Illinois law also extends some protections to insurers. Life Insurance companies can develop and adminster their own claims procedures, so long as they are not in violation of the code. (Claims procedures should be clearly stated in the policy.)
Illinois also enforces no final limit on the amount of time a company can take to investigate a claim. The state recognizes that a claim involving investigation or split proceeds may take some time.
Misrepresentation by a policyholder or applicant can be considered fraud and prosecuted. Life insurance companies in Illinois retain the right to investigate any claim received within two years after the policy is issued. If they find any ommisions or inacurracies, they can rescind the policy and refund the premiums.
Death by suicide may be excluded for the first two years of the policy at the insurer's discretion. Sidebar
If you are ready to apply for an Illinois term life insurance policy, or if you just want a quick online quote, visit Efinancial now.
If you are not sure about what type of life coverage you want, you can also try InsureME. They will put you in touch with agents who can answer any questions that you might have.
The Illinois Life Insurance Guaranty
Licensed life insurance companies in Illinois are backed by the Illinois Life and Health Insurance Guaranty Association, which helps cover policyholders in case of insurer insolvency.
However, this protection is restricted. Compensation for lost death benefit proceeds may not exceed $300,000 per insured individual and compensation for cash values can't exceed $100,000. These limits apply even in the event of multiple policies with a higher total coverage amount.
An insurer must be licensed in Illinois for its policyholders to qualify for this protection. You can check the status of your insurer by calling the state's Department of Insurance toll-free at (877) 527-9431. Sidebar
Apply for a quote with confidence at Efinancial
(for Illinois term life insurance), or InsureME.
Your insurer will be licensed in Illinois.
Other notes on Illinois life insurance
Insurance illustrations are required in Illinois by Title 50 of the Illinois Administration Code. The content of these financial projections is regulated by the code.
Viatical settlements are not regulated in Illinois. (These settlements involve the third-party purchase of a life insurance policy from the insured.) However the viatical settlement providers must register with the Illinois Department of Insurance. It's wise to contact a licensed agent before arranging this type of settlement.
More IL life insurance help
If you want more help getting the best value on your IL 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 IL life insurance laws and regulations, visit the state's official website at the Illinois Department of Insurance.
Learn even more: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.
Our free life insurance course is designed to help you do just that.
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