The national guide covers the standard life provisions, nonforfeiture options, dividend and settlement options, and riders. Colorado writes its own versions of several provisions into C.R.S. 10-7-102, 10-7-103, 10-7-109 and 10-7-302, and its replacement and illustration rules into Regulations 4-1-4 and 4-1-8. The Colorado numbers below differ from the "typical" figures in many textbooks, so learn them.

Required provisions (C.R.S. 10-7-102)

• Entire contract: a statement can be used to void the policy only if it is in a written application and a copy is attached to the policy when issued (10-7-102(1)(c)).
• Incontestability: the policy is incontestable after it has been in force during the insured's lifetime for two years from its date (10-7-102(1)(b)). The only permitted exceptions are nonpayment of premium and violation of conditions relating to military or naval service in wartime or other prohibited risks. Colorado's statute has no fraud exception.
• Grace period: one month, not less than 30 days. Coverage continues during the grace period, and an unpaid premium may be deducted from a claim (10-7-102(1)(i)).
• Misstatement of age: the insurer pays what the premium would have bought at the correct age (10-7-102(1)(d)).
• Final expense policies must state in prominent type that the proceeds may not cover any particular funeral goods or services (10-7-102(1)(j)).

Suicide

• Colorado limits the suicide exclusion to the first policy year. After the first year, suicide is no defense, sane or insane (10-7-109).
• The rule does not apply to accident policies or to accidental death benefits within a life policy.

Free look and replacement

• Free look: the policy must state that the owner may return it within 15 days of delivery for a refund of premium. For variable life, the refund is the account value plus any fees deducted (10-7-302(1)(g)). Delivery starts the clock.
• Replacement (Reg. 4-1-4):
  • The producer gets a signed statement on whether the applicant has existing policies. If the answer is no, the producer's replacement duties end there.
  • If replacement is involved, the producer reads the Notice Regarding Replacement no later than when the application is taken. The applicant and producer both sign it, and the applicant keeps a copy. All sales material is left with the applicant.
  • The replacing insurer notifies each existing insurer within five business days and gives a 30-day right to return for a full refund.
  • Replacement records are kept five years or until the next examination, whichever is later.
  • Internal replacements must credit time already served under the old policy's incontestable and suicide periods, up to the old face amount.
  • Replacing non-convertible, non-renewable term that expires within five years is exempt.
• Lapse notice: an annual-premium policy lapses only after a notice is sent by first-class mail (or e-mail, with consent) at least 25 days before lapse. This does not apply to policies with monthly or more frequent premiums (10-7-105.5).

Policy values and benefits

• Nonforfeiture: a cash value is required after three full years of premium (five for industrial). The owner may elect a paid-up option within 60 days after the defaulted premium was due (10-7-302(1)).
• The insurer may defer paying cash surrender value for up to six months after demand (10-7-302(3)).
• Policy loans: a policy can't be forfeited for an unpaid loan until one month after notice is mailed to the insured and any assignee (10-7-103(1)(a)).
• Lawsuits: the policy may not shorten the time to sue to less than five years after the cause of action accrues (10-7-103(1)(b)).
• Interest on death claims: paid from the date of death. If the claim isn't paid within 30 days after a complete request, the rate rises to 2 points above the federal discount rate (10-7-112). No interest is owed if the beneficiary elects a non-lump-sum option.
• Accelerated benefits are allowed for terminal illness, physician-certified health or long-term care expenses, or a qualifying event defined in the policy (10-7-113).
• Spendthrift clause: a policy may bar a beneficiary from commuting, assigning or encumbering retained proceeds, and may shield them from the beneficiary's creditors (10-7-106).

Illustrations (Reg. 4-1-8)

• An illustration may not suggest that non-guaranteed elements are guaranteed.
• If the policy is issued differently from what was illustrated, a "Revised Illustration" is signed by the owner.
• Illustrations are kept three years after the policy ends.
• Life advertising may not use the term "vanishing premium" (Reg. 4-1-2).

Exam traps

• Suicide: one year in Colorado, not two.
• Free look: 15 days, or 30 days on a replacement.
• Incontestability: two years, and the statute has no fraud exception.
• Grace: one month / at least 30 days. A lapse notice is required 25 days before lapse for policies paid less often than monthly.