State RegulationsNC specificDifficulty 3/5
A producer in Durham replaces a client's existing life insurance policy with a new policy from another insurer. Which statement correctly describes the new policy's return right under 11 NCAC 12 .0612(a)(4)?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under 11 NCAC 12 .0612(a)(4), in a replacement transaction the replacing insurer must give notice of the right to return the new policy within 30 days of delivery for an unconditional full refund of all premiums and considerations, including policy fees. This 30-day right belongs to replacements only; the standard free look on an individual life or annuity policy is 10 days under 11 NCAC 12 .0447.
Why the other options are wrong
- A) 10 days is the standard free-look period under 11 NCAC 12 .0447; a replacement transaction carries the extended 30-day right instead.
- C) No 90-day return right exists, and the replacement refund is an unconditional full refund under 11 NCAC 12 .0612(a)(4), not one reduced by claims paid.
- D) The return right arises after delivery despite the signed application; the signed Notice Regarding Replacement triggers the disclosure duties, not a waiver of the return right.
Memory hook
Standard free look 10, replacement 30 - replacements buy ten extra days.