State RegulationsNC specificDifficulty 2/5
Under G.S. 58-58-120's notice-before-forfeiture rule, which of the following life premium arrangements IS still subject to the written-notice requirement?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-58-120, the notice-before-forfeiture requirement does not apply to premiums payable monthly or more frequently, to group contracts, or to term policies of one year or less. An annual-premium whole life policy — even one with a grace period — is not exempt, so the insurer must mail the statutory notice before a forfeiture for nonpayment takes effect.
Why the other options are wrong
- A) Premiums payable monthly or at shorter intervals are expressly exempt from the notice requirement.
- C) Group contracts are expressly exempt from the notice requirement.
- D) Term policies of one year or less are expressly exempt from the notice requirement.
Memory hook
Exempt: monthly, group, short-term — everyone else gets the notice.