DC Life Insurance Flashcards

In the District of Columbia, what is the free-look period for a newly issued life insurance policy?

Answer: 10 days

DC requires a minimum 10-day free-look period during which a policyholder may return a new life insurance policy for a full premium refund.

Which of the following best describes a term life insurance policy sold in DC?

Answer: Provides coverage for a specified period with no cash value

Term life insurance provides death benefit coverage for a defined period and does not accumulate cash value.

Under DC law, the incontestability clause in a life insurance policy limits the insurer's right to contest the policy after how long?

Answer: 2 years from issue

DC follows the standard that life insurers may not contest a policy after it has been in force for two years, except for fraud.

A DC life insurance applicant intentionally misrepresents a material fact on the application. What is the likely consequence?

Answer: The insurer may void the policy for material misrepresentation

Material misrepresentation on a life insurance application allows the insurer to rescind the policy, especially within the contestability period.

Which of the following is a characteristic of whole life insurance policies available in DC?

Answer: Cash value accumulates on a tax-deferred basis

Whole life insurance builds cash value over time, and that growth is tax-deferred until withdrawn.

In DC, if a life insurance policyholder dies during the grace period without having paid the overdue premium, how is the claim typically handled?

Answer: The claim is paid but the unpaid premium is deducted from the death benefit

During the grace period the policy remains in force, so the death benefit is paid minus any outstanding premium owed.