The standard life provisions, nonforfeiture, dividend and settlement options, and riders are covered in the national Life Policy Provisions guide. Massachusetts writes its required individual life provisions into M.G.L. c.175 s.132, its loan rules into s.142, group life into ss.134 and 134A, and replacement into 211 CMR 34. Use the Massachusetts numbers below on state questions.

Required provisions (c.175 s.132)

No fraud exception to incontestability. The Massachusetts statute lists only the exceptions in the table.

Policy loans (s.142)

• An owner may borrow up to the loan value once three full years of premiums have been paid.
• The policy may use a fixed loan rate of no more than 8% a year, or an adjustable maximum rate.
• When indebtedness reaches the loan value, the policy can't end until 30 days after notice is mailed to the owner.

Other Massachusetts life rules

• Backdating (s.130). A policy may not be dated more than six months before the application to save age.
• Policy face (s.129). The face of a policy or annuity must carry a plain description, in bold letters, so its nature isn't mistaken.
• Changing a beneficiary (s.123). The owner's signature on a change request must be witnessed by a disinterested adult who isn't a new beneficiary.
• Minors (s.128). A minor 15 or older may buy life insurance on their own life. A child under 15 may be insured on an application signed by a parent or guardian (s.123).
• Insurable interest (s.123A).
  • A 501(c)(3) charity has an insurable interest in the life of any donor.
  • A corporation has an insurable interest in anyone whose death could cause it financial loss.
• Underwriting limits. An insurer may not:
  • require a genetic test (s.120E)
  • refuse a policy solely because the applicant is blind (s.120B)
  • rate solely on lawful travel (s.122A)
  • ask about abuse history (s.120D)
• Free look (s.187H). A 10-day right to return the policy for a full refund is required on individual life policies with a face amount under $25,000. A policy returned to the home office, a branch or the selling agent is void from the start.
• Paying the claim:
  • Interest on death proceeds starts 30 days after death (s.119C).
  • Proceeds include any premium paid for the period after the policy month of death (s.119B).
• Misrepresentation by the agent (s.181). A policyholder induced to buy by an agent's misrepresentation may sue within two years of issue to recover the premiums paid.
• Premium notices (s.110B). If the insurer doesn't mail a premium notice 10 to 45 days before the due date, an annual-premium policy can't lapse until three months after the due date.

Disclosure and illustrations

• Buyer's Guide (211 CMR 31.05). It is given before the initial premium is accepted, or with the policy if there is an unconditional refund right of at least 10 days.
• Policy summary. A policy form not marketed with an illustration gets a policy summary showing guarantees only.
• Illustrations (211 CMR 28). Illustrations may not use the term "vanishing premium." The applicant signs a statement that non-guaranteed elements may be higher or lower.

Replacement (211 CMR 34)

What counts as replacement. Borrowing more than 25% of the policy's loan value counts as a replacement transaction. Group life is exempt.

Producer's duty. The producer presents the replacement notice, signed by the applicant and the producer, no later than when the application is taken, and leaves it with the applicant.

Insurers' duties:

• The replacing insurer sends the existing insurer notice and a policy summary within 7 working days of the application or policy issue, whichever is sooner.
• The replacing insurer gives an unconditional 20-day right to a full refund after delivery.
• An existing insurer that tries to conserve the policy sends a policy summary within 20 days.
• Replacement records are kept three years or until the next exam, whichever is earlier.

Presumptions:

• A comparison of a participating policy is presumed incomplete without projected dividends.
• A pattern of "no replacement" answers while old coverage drops is prima facie evidence of a violation.

Group life (ss.134, 134A)

• The grace period is 31 days.
• After employment ends, coverage continues 31 days, and the person may convert without evidence of insurability.
• Late notice of conversion. Notice of the conversion privilege is due within 15 days. If it is given later, but within 90 days, the conversion period runs until 15 days after the notice.

Common exam traps

• The grace period is 30 days (31 for group life). The incontestable period is two years, with no fraud exception.
• Reinstatement is available for three years, and loans after three years. Both cap interest at 6%, and the fixed loan rate is capped at 8%.
• The statutory 10-day free look applies only to individual life policies under $25,000. A replacement gets 20 days.
• The replacing insurer notifies the existing insurer within 7 working days.
• Backdating is limited to six months.