The standard life provisions, nonforfeiture, dividend and settlement options, and riders are covered in the national Life Policy Provisions guide. Maryland's required individual life provisions are in Insurance Article Title 16. Group life is in Title 17. Replacement is governed by COMAR 31.09.05, illustrations by 31.09.09, and accelerated benefits by 31.09.16. Use the Maryland numbers below on state questions.

Required provisions (Title 16)

Incontestability has no fraud exception. The Maryland statute lists only nonpayment. A reinstated policy may be contested for fraud or misrepresentation in the reinstatement application only for the same period as at original issue (§ 16-107).

Exclusions and the suicide clause (§ 16-215)

Permitted exclusions:

• war and military service
• aviation
• certain hazards within two years
• suicide within two years

Not permitted: an exclusion for death from terrorism that the insured took no part in.

Suicide clause:

• A policy with a suicide exclusion must still pay a determinable amount of at least the reserve if the insured dies by suicide in the exclusion period.
• New policy from the same insurer. The two-year period runs from when the insurer first issued a policy to the insured. It runs from the new issue date instead if the prior policy ended before the new one was issued, or more than 12 months after it.

Other Maryland life rules

• Backdating (§ 16-104). A policy may not be dated more than 6 months before the application to lower the premium.
• Prohibited provision (§ 16-216). A policy may not reduce the insurer's liability because the insured has other insurance with the same insurer.
• Beneficiaries (§ 16-212). Changing an irrevocable beneficiary requires that beneficiary's consent. A facility of payment clause may let the insurer pay a relative who covered burial costs if the beneficiary hasn't claimed within a stated period of at least 30 days after death.
• Interest on proceeds (§ 16-109). Interest runs from the date of death unless the claim is paid within 30 days of death. If proof comes more than 180 days after death, interest runs from the proof date.
• Creditors (§ 16-111). Proceeds for the insured's spouse, child or dependent relative are exempt from the insured's creditors.
• Exam results (§ 4-404). If a life insurer declines an applicant, it discloses medical exam results to a physician of the applicant's choice on request.

Disclosure, illustrations and accelerated benefits

• Buyer's guide (COMAR 31.15.03). 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. It is titled "Statement of Policy Cost and Benefit Information." An in-force data request may cost up to $50.
• Illustrations (COMAR 31.09.09):
  • labeled "life insurance illustration"
  • the term "vanishing premium" is prohibited
  • a signed copy goes to the insurer and the applicant
  • if no illustration is used, the producer certifies that in writing
• Accelerated benefits (COMAR 31.09.16):
  • not marketed as long-term care
  • a lump-sum option is required, and use of the proceeds can't be restricted
  • the buyer is told the benefit may be taxable and may affect Medicaid eligibility

Replacement (COMAR 31.09.05)

Producer's duties:

• With every life application, the producer submits a statement signed by the applicant and producer on whether there is existing coverage.
• In a replacement, the producer presents, and reads unless declined, the replacement notice no later than when the application is taken. Both sign it, and the applicant keeps a copy.
• The producer leaves all sales material with the applicant.

Insurers' duties:

• The replacing insurer notifies the existing insurer within 5 business days.
• It gives a 30-day right to return the new policy for a full refund.
• If it is the same or an affiliated insurer, it gives credit for time under the old incontestable and suicide periods.
• Policy values requests. When an owner asks to borrow or surrender values, the existing insurer sends a notice within 14 business days that this may affect the policy's values.

Financed purchases. Using values from an existing policy to pay for a new policy from the same insurer, within 4 months before or 13 months after its issue date, is presumed to be a financed purchase.

Violations. Advising an applicant to answer the replacement question "no" counts as twisting. Violations bring license penalties and forfeiture of commissions.

Group life (Title 17)

• The grace period is 31 days (§ 17-302).
• Incontestability. Coverage is incontestable after 2 years. A statement may be used to contest coverage only if it is written and signed by the insured (§ 17-303).
• Noncontributory plans must cover all eligible employees except those who reject coverage in writing (§ 17-201).
• Dependent coverage may not exceed the employee's amount (§ 17-209).
• A facility payment of up to $2,500 may go to whoever paid funeral costs (§ 17-307).

Conversion:

• After employment ends, the employee may convert within 31 days to any form except term, without evidence of insurability (§ 17-309).
• Late notice. If notice of the conversion right comes late, the employee gets 15 days from the notice, but no more than 60 days past the conversion period.
• Death in the conversion period. If the employee dies during it, the convertible amount is paid (§ 17-311).
• Group plan ends. People insured 5 years may convert, and the amount may be capped at $10,000 (§ 17-310).

Viatical settlements (Title 8, Subtitle 6)

• A broker is a life producer who represents only the viator, as a fiduciary.
• The viator may rescind within 15 calendar days after receiving the proceeds.
• "Terminally ill" means death expected within 24 months. "Chronically ill" means unable to perform 2 activities of daily living.

Common exam traps

• The grace period is 30 days (31 for group life). Incontestability runs two years, with no fraud exception.
• The suicide exclusion runs two years, but the reserve must still be paid.
• Maximum loan interest is 6%, or 8% with approval.
• Reinstatement is available for 3 years. A misstated age outside the insurable limits can void the policy within 3 years.
• The free look is 10 days, or 30 in a replacement.
• The replacing insurer notifies the existing insurer in 5 business days.