State RegulationsNC specificDifficulty 3/5
An insurer plans to forfeit an individual North Carolina life policy that carries a grace period because of nonpayment of premium. Under the notice-before-forfeiture statute, when must the written notice of the amount due be mailed?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-58-120, for policies with a grace period the written notice of the amount due, place, and payee must be mailed at least 5 and not more than 45 days before the due date; for policies without a grace period the window is 15 to 45 days. No forfeiture may occur until 30 days after the notice is mailed, and premiums payable monthly or more often, group contracts, and terms of one year or less are exempt.
Why the other options are wrong
- A) The 15-to-45-day window applies to policies without a grace period, not the grace-period policy described here.
- C) No 30-to-60-day mailing window exists in the North Carolina notice-before-forfeiture statute.
- D) No 10-to-30-day mailing window exists in the North Carolina notice-before-forfeiture statute.
Memory hook
No grace, mail at 15; with grace, mail at 5; both stop at 45.