The national guide covers the standard life policy provisions, nonforfeiture, dividend and settlement options, and riders. Idaho's required life provisions are in Idaho Code chapter 41-19, group life rules in chapter 41-20, and replacement rules in IDAPA 18.03.04. These notes give the Idaho numbers. Two are frequent traps: Idaho's life free look is 20 days, and reinstatement interest can run up to 8%.

National concepts in brief

• Nonforfeiture options: cash surrender, reduced paid-up and extended term.
• Dividend options: cash, reduce premium, accumulate at interest, paid-up additions.
• Settlement options: interest only, fixed period, fixed amount, and life income.
• Riders: waiver of premium, accidental death, guaranteed insurability, and accelerated benefits.

Required individual life provisions

Related rules:

• A reinstated policy can be contested over the reinstatement application only for the same period as after original issue (Idaho Code 41-1929).
• Incontestability doesn't stop the insurer from enforcing exclusions (Idaho Code 41-1916).

Free look and claim payment

• Free look: 20 days from delivery for life policies under the nonforfeiture law and for every annuity (Idaho Code 41-1935). A policy returned to the insurer or the agent is void from the beginning, and the premium is refunded.
• Interest on death claims: a death claim not paid within 30 days of satisfactory proof of death earns interest, generally from the date of death (Idaho Code 41-1337).
• Lapse notice:
  • The insurer must mail notice by first-class mail at least 14 days before a lapse.
  • The applicant must be offered the chance to name one additional person to receive the notice (Idaho Code 41-1830).

Ownership, consent and creditors

• Insurable interest must exist when the contract is made. For people who are not close relatives, it is a lawful and substantial economic interest in the insured's life continuing (Idaho Code 41-1804).
• Consent: generally the insured's written consent is required. Exceptions: a spouse insuring the other spouse, a person with an insurable interest insuring a minor, and family policies (Idaho Code 41-1808).
• Minors: a minor 15 or older may buy insurance on their own life and can't later void the contract because of age (Idaho Code 41-1807).
• Assignment: a policy may be assigned. The insurer may deal with the assignee until it receives written notice otherwise (Idaho Code 41-1826).
• Payment discharges the insurer unless it first received written notice of a competing claim (Idaho Code 41-1828).
• Creditor protection:
  • A beneficiary takes the proceeds free of the insured's creditors, except premiums paid to defraud creditors (Idaho Code 41-1833).
  • Group life proceeds are also protected (Idaho Code 41-1835).
• Change of ownership: the insurer must confirm the change, or explain why it can't, within 30 days (Idaho Code 41-1961).

Group life

Required provisions:

• Grace period: 31 days (Idaho Code 41-2011).
• Incontestability: a member's statements can't be used after two years, and only if they are in a signed writing (Idaho Code 41-2012).
• Certificates: each member gets one showing the coverage, the beneficiary and conversion rights (Idaho Code 41-2017).

Conversion:

• On leaving the group, apply within 31 days for any form the insurer customarily issues except term (Idaho Code 41-2018).
• If the group policy ends, only members insured five years may convert, and the amount may be capped at $2,000 (Idaho Code 41-2019).
• If the member dies during the conversion period, the convertible amount is paid as a group claim (Idaho Code 41-2020).
• If notice of the conversion right is late, the period extends to 15 days after notice, but never more than 60 days past the original deadline (Idaho Code 41-2021).

Assignment: members may assign ownership rights, including conversion (Idaho Code 41-2025).

Replacement (IDAPA 18.03.04)

What counts as a replacement: a new purchase where existing coverage is:

• lapsed or surrendered;
• converted to reduced paid-up or extended term;
• reduced in benefits;
• reissued with less cash value;
• borrowed against for more than 25% of its loan value.

Who must do what:

• Applicant: signs a statement with every application saying whether the purchase replaces coverage.
• Producer: presents the replacement notice no later than when the application is taken. It is signed by both and left with the applicant, along with copies of the sales material used.
• Replacing insurer: notifies existing insurers within 5 working days, and gives an unconditional refund right for 20 days from delivery.
• Existing insurer (conservation): if it tries to keep the business, it sends a policy summary or ledger within 20 days.

Records: kept at least three years, or until the next domiciliary exam, whichever is later.

Exempt: credit life, group coverage, and conversions with the same insurer.

Common exam traps

• The Idaho life and annuity free look is 20 days, not 10.
• Reinstatement interest is capped at 8%; grace-period interest at 6%.
• Policy loans become available after three full years of premiums.
• Group conversion: 31 days, any form except term. If the plan ends, 5 years of coverage and a $2,000 cap.
• Borrowing more than 25% of the loan value can make a sale a replacement.