State RegulationsNC specificDifficulty 2/5
A producer in Greensboro sells a new life policy that will replace an existing life policy owned by the applicant. What return right must the replacing insurer disclose to the applicant?
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Answer & full 3-part explanation (select an option above, or peek)
Why A 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 policy within 30 days of delivery for an unconditional full refund of all premiums and considerations, including policy fees. This 30-day right applies only to replacements; the standard free look for an ordinary life or annuity policy is 10 days.
Why the other options are wrong
- B) Ten days is the standard free-look period for an ordinary policy, not the enhanced right given in a replacement.
- C) 31 days is the life grace-period figure and has no role in the replacement return right.
- D) No 45-day return right exists; 45 days is the outer mailing limit in the notice-before-forfeiture statute.
Memory hook
Replacement doubles the standard ten-day look to thirty.