The standard life policy provisions, nonforfeiture and settlement options, dividend options and riders are explained in the national Life Policy Provisions, Options and Riders guide. This guide covers the provisions New York requires in life policies (Insurance Law 3203), its rules on exclusions and accelerated benefits, and Regulation 60 on replacements, which gives a 60-day free look.

Required provisions (Ins. Law 3203(a))

Exclusions and suicide (Ins. Law 3203(b), (c))

• Suicide may be excluded only within two years from the date of issue.
• Other permitted exclusions include specified aviation risks, hazardous occupations within two years, and certain war and military service risks.
• For an excluded death within two years, the insurer pays at least the premiums paid, less dividends and loans. After two years, at least the reserve.

Other New York rules

• Backdating: a policy can't knowingly be dated more than six months before the application if that lowers the premium (Ins. Law 3208).
• Multiple beneficiaries with no stated shares take equal portions (Ins. Law 3213).
• Accelerated death benefits (Ins. Law 3230) advance part of the death benefit for a qualifying terminal or chronic illness. The application must warn that they may affect public assistance eligibility and may be taxable. The insurer sends an illustration within five days of a request, can't pay until five days after that, and the owner may change their mind. Under a group policy, only the certificateholder can accelerate.

Replacement (Regulation 60, 11 NYCRR 51)

• Replacement includes lapsing, surrendering, converting to reduced paid-up or extended term, or borrowing against or assigning existing coverage as part of the new purchase (51.2).
• With each application, the applicant and producer sign a Definition of Replacement, and the applicant keeps a copy (51.5(a)).
• If it's a replacement, the producer presents the "IMPORTANT Notice Regarding Replacement" no later than when the applicant signs the application, leaves a copy and gets an acknowledgment (51.5(c)(4)).
• Before delivery, the producer submits a signed Disclosure Statement giving the main reasons for the recommendation and why the existing coverage can't meet the applicant's objectives (51.5(c)(7)).
• The existing insurer provides requested information within 20 days (51.6(c)).
• 60-day free look: the owner of a replacement policy or annuity may return it within 60 days of delivery for a full refund. The replaced insurer must reinstate the original coverage without new underwriting or a new contestable or suicide period (Ins. Law 2123(a)(3); 51.6(d)).
• Producers may not tell applicants to answer replacement questions "no." A pattern of undisclosed replacements among one producer's clients is evidence the producer knew (51.7).
• Exempt: for example, existing nonrenewable, nonconvertible term with five years or less left (51.3).

Common exam traps

• Grace: 31 days fixed premium, 61 days flexible premium.
• Free look: 10 to 30 days, 30 for mail order, and 60 days for replacements.
• Suicide exclusion: two years from issue.
• Loan interest: no more than 7.4% fixed (payable in advance), or an adjustable rate.
• Backdating limit: six months.
• Regulation 60: Definition of Replacement with every application; IMPORTANT Notice at application; Disclosure Statement before delivery.