§ 27-4-6.2 - Individual life insurance policy standard provisions.
SECTION 27-4-6.2
§ 27-4-6.2 Individual life insurancepolicy standard provisions. – (a) All individual life insurance policies, except as otherwise stated herein,delivered or issued for delivery in this state on or after January 1, 2008shall contain in substance the following provisions, or provisions which thedirector deems to be more favorable to policyholders.
(1) Grace period. A provision that, after payment ofthe first premium, the policyholder is entitled to a grace period of thirty-one(31) days or of one month following any subsequent premium due date withinwhich to make payment of the premium then due, during which grace period thepolicy shall continue in full force, and the policy shall further provide thatif the death of the insured occurs within the grace period provided in thepolicy, the insurer may deduct from the policy proceeds the portion of anyunpaid premium applicable to the period ending with the last day of the policymonth in which such death occurred, and if the death of the insured occursduring a period for which the premium has been paid, the insurer shall add tothe policy proceeds a refund of any premium actually paid for any period beyondthe end of the policy month in which such death occurred, provided such premiumwas not waived under any policy provision for waiver of premiums benefit. Thissubsection shall not apply to single premium or paid-up policies.
(2) Incontestability. A provision that the policyshall be incontestable after being in force during the lifetime of the insuredfor a period of two (2) years from its date of issue, and that, if the policyprovides that the death benefit provided by the policy may be increased, orother policy provisions changed, upon the application of the policyholder andthe production of evidence of insurability, the policy with respect to eachsuch increase or change shall be incontestable after two (2) years from theeffective date of such increase or change, except in each case for nonpaymentof premiums. At the option of the insurer, provisions relating to benefits fortotal and permanent disability and additional benefits for accidental death maybe excepted.
(b) Individual life insurance policies delivered or issuedfor delivery in this state on or after January 1, 2008 may contain in substancethe following provision, or a provision which the director deems to be morefavorable to policyholders: Suicide – a provision that excludes death fromsuicide, sane or insane. The suicide exclusion period for the initial coverageshall not exceed two (2) years from the date of issue of the policy. The policymay allow a separate suicide period, no greater than two (2) years from thedate of any increase, for any increase in specified amount that was requestedby the owner and subject to evidence of insurability. The suicide limitationshall be limited to the amount of the increase. At a minimum, a refund of allpremiums paid, less dividends paid, any indebtedness and any partialwithdrawals, shall be paid by the company in the event of death by suicideduring the initial suicide exclusion period. For each increase in specifiedamount, the settlement for suicide shall be the return of all premium paid,reduced as specified above for the initial coverage, applicable to theincreased amount.