The national guide explains the standard life policy provisions, nonforfeiture and dividend options, settlement options and riders. This guide covers Missouri's own rules. They include a 1-year suicide clause with a premium refund, the nonforfeiture and loan rules, group life, and the replacement regulation.

Suicide (RSMo 376.620)

• A life policy may exclude suicide, sane or insane, only within 1 year from the date of issue.
• A policy with a suicide exclusion must provide that the insurer will promptly refund all premiums paid for the excluded coverage.
• For an increase in death benefits, the 1-year exclusion applies only to the increase.

Nonforfeiture, loans and cash values

• Cash surrender value is required after premiums have been paid for at least 3 full years on ordinary insurance (376.670).
• Paid-up nonforfeiture benefit: must be granted on request no later than 60 days after the due date of the defaulted premium.
• The insurer may defer paying a cash surrender value for up to 6 months after demand.
• Options: cash, reduced paid-up and extended term.
• Policy loans can't exceed the policy's legal reserve (376.306).
• Loan interest (20 CSR 400-1.090):
  • A fixed maximum of 8% a year, or an adjustable maximum.
  • The adjustable rate is reset at least every 12 months, and no more often than every 3 months.
  • A policy can't terminate in a policy year solely because the rate changed that year.

Other policy rules

• Assignment: the insured may assign any or all incidents of ownership, including the right to name a beneficiary (376.680).
• Form filing: forms must be filed with and approved by the Director. Failure to act within 45 days is deemed approval (376.675).
• Required face notice: "READ YOUR POLICY CAREFULLY," plus a statement that certain war or aviation risks aren't assumed (20 CSR 400-1.080).
• Free look: Missouri has no general free-look statute for individual life policies. Specific products do have return rights:
  • Graded death benefit policies show a 30-day right to return on the face (20 CSR 400-1.040).
  • Variable life carries a 10-day right (20 CSR 400-1.030).
  • Replacements get 30 days (20 CSR 400-5.400).

Graded and variable products

• Graded death benefits: grading may last no more than 3 years for issue ages through 65, unless the first-year benefit is at least 50% of the ultimate face. Accidental death benefits during the graded period must be at least the face amount (20 CSR 400-1.040).
• Variable life: cash value is figured at least monthly. The variable death benefit is adjusted at least annually. The minimum death benefit is guaranteed whatever the separate account does (20 CSR 400-1.030).
• Universal life (20 CSR 400-1.100):
  • An annual report.
  • A grace period of at least 30 days after the cash value hits zero, plus 30 days' notice before termination.
  • Interest credits can't stay conditional more than 24 months.

Replacement (20 CSR 400-5.400)

• The applicant and producer sign a statement on whether existing coverage exists. If not, the producer's replacement duties end.
• The producer presents and reads the replacement notice no later than when taking the application. Both sign. Copies of all sales material are left with the applicant.
• The replacing insurer gives notice to the existing insurer within 5 business days. It keeps records for 5 years or until the next exam.
• It also gives a 30-day right to return for a full refund.
• It credits time already served under the old policy's incontestable and suicide periods, up to the old face amount.
• Using existing values from 4 months before to 13 months after the new policy's effective date is evidence of a financed purchase.
• Existing nonconvertible term expiring within 5 years is exempt.

Illustrations and advertising (20 CSR 400-5.100)

• No "vanishing premium" language.
• Dividends can't be called tax-free without explaining them as a return of premium.
• Ads identify the insurer and are kept 5 years.

Group life (376.691–376.699)

Credit life (chapter 385)

• Coverage is limited to the debt.
• The policy or certificate is delivered within 30 days of the debt.
• Refunds are due on early payoff, though refunds under $1 need not be made.
• The creditor can't act as the insurer's claims representative.

Common exam traps

• Suicide: 1 year from issue, with premiums refunded.
• Cash value after 3 years. Cash surrender may be deferred 6 months. Loan interest: 8% fixed or adjustable.
• No general life free look. Graded benefit 30 days, variable 10 days, replacement 30 days.
• Group life incontestability allows a fraud exception. Conversion: 31 days.