Oklahoma writes many standard life policy provisions directly into Article 40 of Title 36. The state questions ask for Oklahoma's numbers: the grace period, the incontestable period, how long you have to reinstate, the policy loan rules, the suicide clause, the 10-day free look, and nonforfeiture deadlines. The provisions themselves (what a grace period or a settlement option is, how the riders work) are explained in the national Life Policy Provisions, Options and Riders guide.

Required provisions in individual life policies

Grace period (36 O.S. 4003)

• At least 30 days for each premium after the first.
• If the insured dies during the grace period, the insurer pays the claim minus the overdue premium.

Incontestability (36 O.S. 4004, 4015, 4025)

• A policy is incontestable after 2 years in force during the insured's lifetime, except for nonpayment of premium (4004). This doesn't apply to disability and accidental death benefits.
• Even after that, the insurer may still adjust benefits for misstated age and rely on coverage exclusions (4015).
• A reinstated policy can be contested for fraud or material misrepresentation only for the same period as after original issue (4025).

Entire contract (36 O.S. 4005)

• The policy plus the attached copy of the application is the entire contract.
• Absent fraud, the applicant's statements are representations, not warranties.

Misstatement of age (36 O.S. 4006)

• Benefits are adjusted to what the premium would have bought at the true age.

Dividends (36 O.S. 4007)

• A participating policy must start apportioning divisible surplus annually no later than the end of the third policy year.
• If the policy limits the time to elect a dividend option, the period can't be shorter than 30 days after the dividend is payable.

Policy loans (36 O.S. 4008)

• A cash loan must be available once premiums have been paid for at least 3 full years.
• The insurer may defer a loan (other than one to pay premium) for up to 6 months.
• For policies issued on or after July 1, 1982, the loan rate is either a fixed rate of no more than 8% or an adjustable rate tied to a published corporate bond average.
• When the loan reaches the loan value, the policy may end, but only after the insurer mails 30 days' notice.
• An automatic premium loan provision is optional, at the owner's election.

Reinstatement (36 O.S. 4011)

• A lapsed policy that wasn't surrendered for cash can be reinstated within 3 years of the premium default.
• The insurer may require evidence of insurability and payment of overdue premiums.
• Interest on overdue premiums can't exceed 6% compounded annually.

Premium payment and settlement

• Premiums after the first are payable at the home office or to an agent who delivers a receipt signed by a designated officer (36 O.S. 4012).
• If the policy states a time for settling death claims, it can't be more than 2 months from receipt of proof of death (36 O.S. 4013).
• With no settlement agreement by the owner, the insurer may hold proceeds under an agreement with the beneficiaries (36 O.S. 4026).

Permitted exclusions (36 O.S. 4024)

The only exclusions allowed in an individual life policy:

• War or military action.
• Certain aviation activities.
• Suicide, sane or insane, within 2 years of issue. The insurer then returns all premiums paid.

Travel: an applicant can't be refused because of lawful travel to a particular country unless the decision rests on sound actuarial principles (4024(C)).

Free look (36 O.S. 4003.1)

The ordinary free look

• Individual life policies and annuities must allow a 10-day right to return the contract after delivery.
• A returned policy is void from the beginning. It counts as canceled on the date it is mailed.
• The premium must be refunded within 30 days. A late refund carries interest at the prior year's average T-bill rate plus 2 points.
• The 10-day notice requirement doesn't apply to policies issued in a credit transaction.

Replacements

• A replacement policy or annuity gets a 20-day right to return (36 O.S. 4034(G)).
• The full replacement procedure is in the Oklahoma Insurance Regulation guide.

Nonforfeiture (36 O.S. 4029, 4037)

• After premiums have been paid for at least 3 full years, an owner who defaults may choose a paid-up nonforfeiture benefit within 60 days after the premium due date (4029(B)(1)).
• If the owner doesn't choose, the option specified in the policy applies automatically (4029(B)(3)).
• The insurer may defer paying a cash surrender value for up to 6 months after surrender (4029(C)).
• Term policies of 20 years or less don't need a cash surrender value (4029(D)(1)).

Accelerated benefits for long-term care (36 O.S. 4426(H)-(I))

• When a life policy provides LTC benefits, a policy summary is delivered with the policy.
• While benefits are being paid by accelerating the death benefit, the policyholder gets a monthly report.

Other Oklahoma life rules

Common disaster (36 O.S. 3628)

• If the insured and the primary beneficiary die together with no evidence of who died first, proceeds are paid as if the insured survived the beneficiary, unless the policy says otherwise.

Creditors (36 O.S. 3631.1)

• Life insurance proceeds and cash values payable to a beneficiary are generally exempt from creditors.
• The exemption doesn't apply to a debt secured by a pledge of the policy.

Premium after death (36 O.S. 3623.2)

• Premium paid for any period after the date of death is refunded pro rata by day within 90 days of proof.

Group life (36 O.S. 4103)

• Grace period: 31 days.
• Certificates: each insured gets an individual certificate.
• Funeral expenses: up to $500 may be paid to a person who incurred them.
• Conversion after leaving employment: apply and pay the first premium within 31 days. No evidence of insurability is needed.
• Conversion when the group policy itself ends: only for people insured under it for at least 5 years.

Viatical settlements (36 O.S. 4055.3, 4055.9)

• The viator may rescind before the earlier of 30 days after signing or 15 days after the proceeds are sent.
• The provider notifies the insurer within 20 days after the transfer documents are signed.
• A life producer licensed at least one year who starts acting as a viatical settlement broker notifies the Commissioner within 30 days.

Common exam traps

• Grace periods: individual life is 30 days; group life is 31 days.
• Suicide: 2 years, with a return of all premiums paid.
• Free look: 10 days ordinary, 20 days for replacements, refund within 30 days.
• Reinstatement: 3 years, at no more than 6% interest compounded annually.
• Policy loans: available after 3 full years of premium; fixed rate cap 8%; 30 days' notice before termination for excess loans.
• Misstated age can be corrected even after the policy becomes incontestable.