Iowa Life Insurance

All companies selling life insurance in Iowa are subject to specific rules and regulations. Understanding the state's life insurance regulations and knowing where to turn for help can help you choose and maintain the best coverage for your circumstances.

Iowa Life Insurance Rules and Specifics

The Iowa Insurance Division regulates the state's life insurance industry following rules set out in the Iowa Legislature. Chapters 30 through 44 deal specifically with life insurance contracts.

Grace Period

All life insurance providers in Iowa must allow a grace period of at least 31 days for fixed premium policies. The grace period allows the policy to remain active for 31 days after a premium payment is due so that you don't lose your coverage if you miss a payment. The death benefit remains unchanged, but the company can deduct the missed payment from any payout before you get back on track with your premiums. 

Prohibited Policies

The Iowa Legislature expressly prohibits insurers from selling life insurance products labeled as founders, profit-sharing or coupon policies. Policies offering guaranteed pure endowment benefits are forbidden unless:

• The policy clearly and prominently states the premium charges for guaranteed pure endowment benefits
• The company does not require the policyholder to continue making premium payments after the endowment's maturation to receive the benefits
• The policy clearly states the monetary value of the endowment benefits in dollars and not as a percentage of premiums paid
• The policy and any advertising clearly explains that the endowment is a guaranteed insurance benefit

Reinstatement

Iowa requires that all variable life insurance contracts allow the holder to reinstate the policy within one year following a default. You can't reinstate your life insurance policy if you have already surrendered it in exchange for a cash value payment. You'll also need to pay any outstanding premiums, which may include interest on missed payments. 

Life Insurance Resources in Iowa

The Iowa Insurance Division's Market Regulation Bureau offers consumer advocacy services and helps citizens understand their insurance options. You can contact the Market Regulation Bureau to get advice about problems or queries relating to your life insurance policy or file a complaint against your insurer. 

The Iowa Insurance Division website also provides a range of educational materials to help you understand your life insurance options. The available resources include video guides explaining how to find a reputable insurance agent and information about selling a life insurance policy for cash. 

The Iowa Life & Health Insurance Guaranty Association protects policyholders if their insurer becomes financially insolvent. All licensed insurers offering life insurance policies must have Guaranty Association Membership. You can contact the association for advice if your insurer can no longer fulfill its financial obligations, and you may qualify for continued coverage directly through the association or another financially stable insurer.