What is a necessary policy provision for individual life insurance in New Mexico?

A necessary policy provision for individual life insurance in New Mexico is the inclusion of a 30-day grace period for premium payments. This provision is important because it gives policyholders extra time to make their premium payments without the risk of losing their coverage. If an insured individual fails to pay their premium by the due date, the grace period allows them to bring their payment up to date within 30 days before the policy lapses. This protection is designed to ensure that life insurance coverage remains in force, even if a policyholder experiences temporary financial difficulties.

Other options do not represent mandatory provisions in individual life insurance policies in New Mexico. While guaranteed interest rates on cash value or minimum payout clauses can be beneficial features of specific policies, they are not uniformly required by law. Likewise, the absence of a claim limit clause may not be a standardized provision, as many policies include certain stipulations regarding claim limits. Thus, the grace period serves as a vital safety net for policyholders, promoting stability and ensuring continued coverage.