State RegulationsNC specificDifficulty 2/5
A Raleigh applicant is replacing an existing life policy with a new policy from another insurer. Under 11 NCAC 12 .0612(a)(4), what return right must the replacing insurer give notice of?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under 11 NCAC 12 .0612(a)(4), in a replacement the replacing insurer must notify the applicant of the right to return the policy within 30 days of delivery for an unconditional full refund of all premiums and considerations, including policy fees; for variable products the refund is the cash surrender value plus deducted fees. The thirty-day replacement right is triple the standard ten-day free look precisely because replacement decisions carry greater risk of loss to the consumer.
Why the other options are wrong
- A) Ten days is the standard free look, and the replacement refund is unconditional and includes policy fees.
- B) Five business days is the deadline for notifying existing insurers, not an applicant return right.
- C) Sixty days is not the statutory period for the replacement return right.
Memory hook
Replacement triples the look: 30 days, full refund, no conditions.