State RegulationsNC specificDifficulty 3/5
Under G.S. 58-58-120, which of the following policies is EXEMPT from the notice-before-forfeiture requirements for nonpayment of premium?
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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 written notice of the amount due before forfeiture does not apply to premiums payable monthly or more often, to group contracts, or to policies with a term of one year or less. A group life contract falls squarely within the exemption, so the insurer may forfeit without the statutory mailed notice. Annual- or quarterly-premium individual policies with terms longer than one year remain fully subject to the notice requirement.
Why the other options are wrong
- A) Quarterly premiums are less frequent than monthly and the term exceeds one year, so no exemption applies.
- C) An annual-premium term policy with a duration longer than one year is not within any exemption.
- D) An annual-premium individual universal life policy is not group, not monthly-or-shorter, and not a term of one year or less.
Memory hook
Monthly, group, or short term — no forfeiture notice needed.