Free Life Policy Provisions Options and Riders Study Guide
Utah Life exam — Life Policy Provisions Options and Riders.
Utah sets its own life policy rules in Utah Code 31A-22-401 to 31A-22-430, with replacement under R590-93. Several Utah rules are more specific than the general rules in the national guide. Examples are the suicide refund formula, the 10% interest on late death claims and the backdating limit. This guide gives the Utah versions.
Free look (31A-22-423)
- A life policy or annuity may be returned within 10 days after delivery, or 30 days for a replacement. It's then void from issue, with premium refunded.
- The owner returns it in writing, by delivery or first-class mail, to the insurer or its agent.
- Excluded: group term life, group master policies, noncontributory certificates and credit life certificates.
Required provisions and limits
| Topic | Utah rule |
|---|---|
| Grace period (31A-22-402) | At least 31 days, or 4 weeks if premiums are due more often than monthly. The policy stays in force. The insurer may deduct the premium due, plus interest at no more than the policy loan rate. |
| Lapse notice (31A-22-402, 31A-22-430) | At least 30 days before coverage ends, mailed to the owner and any third-party designee. Applicants are told in writing at application that they can name a designee. |
| Incontestability (31A-22-403) | Incontestable after 2 years in force during the insured's lifetime, or the surviving insured's lifetime for survivorship policies. Exceptions: nonpayment, and A&H or accidental death benefits. An increase in coverage is contestable for 2 years, and only on grounds tied to the increase. A reinstatement is contestable for 2 years, and only on matters arising from it. |
| Suicide (31A-22-404) | Not a defense after 2 years from issue, sane or insane. For a suicide within 2 years, the insurer pays at least the premiums paid minus dividends paid, debt and withdrawals. |
| Misstatement of age or gender (31A-22-405) | The benefit is what the premium would buy at the correct age or gender. If the insured was over the insurer's maximum age, at least the premiums are refunded. |
| Reinstatement (31A-22-407) | Within 3 years of default, or 2 years if the face amount is under $5,000. Requires proof of insurability and payment of arrears and debt with interest. Not available after a cash surrender. |
| Entire contract (31A-22-424) | The policy defines the documents in the contract, and they must be attached. |
| Policy loans (31A-22-420) | Interest is capped at a fixed 8%, or an adjustable rate reset at least every 12 months and no more often than every 3 months. |
| Nonforfeiture (31A-22-408) | A paid-up benefit is available if requested within 60 days after the default. Cash value payment may be deferred 6 months. |
| Death claim interest (31A-22-428) | Interest runs from the date of death. An extra 10% a year applies starting 31 days after proof and the information needed. |
Prohibited provisions (31A-22-401)
- Forfeiting the policy for an unpaid loan while the debt is below the loan value.
- Backdating more than 1 year before the application to rate the insured younger, unless the premiums for the backdated period are paid.
- Assessments on policyholders.
- Ending the policy for anything other than nonpayment or misrepresentation allowed by 31A-21-105.
Beneficiaries and assignment (31A-22-412, 31A-22-413)
- A revocable beneficiary can be changed freely. An irrevocable one needs consent.
- A change form delivered to an agent at least 3 days before payment counts as actual notice to the insurer.
- An assignee's rights come before the beneficiary's, unless the beneficiary was named irrevocably before the assignment.
- An assignee who asks gets copies of cancellation notices at least 10 days before termination.
Replacement (31A-22-429; R590-93)
- The producer's duties:
- present the replacement notice no later than taking the application
- leave copies of all sales materials by delivery
- The replacing insurer's duties:
- notify affected insurers within 5 business days
- give a 30-day right to return
- A withdrawal, surrender or loan within 4 months before to 13 months after the new policy's date is evidence of a financed purchase.
- A same-company replacement credits the time already served under the old incontestability and suicide periods.
- Replacement records are kept 5 years, or until the next exam if later.
Policy delivery disclosures
The buyer's guide and a policy summary or illustration are given at delivery, or earlier on request (R590-79-4).
Common exam traps
- Free look: 10 days, or 30 for a replacement.
- Grace period: 31 days.
- Suicide within 2 years returns premiums minus dividends, debt and withdrawals.
- Reinstatement: 3 years, or 2 under $5,000.
- Backdating: no more than 1 year.
- Loan interest: a fixed maximum of 8%.
- Late death claims earn an extra 10%.
Practice Life Policy Provisions Options and Riders questions All Life topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
