Free Types of Life Insurance Policies Study Guide
Washington Life, Accident & Health exam — Types of Life Insurance Policies.
The national Types of Life Insurance Policies guide covers term, whole life, universal and variable life, group life and credit life. This guide covers the Washington rules that apply to those products: the group life standards in chapter 48.24 RCW and the license requirements for variable life.
Group life eligibility (chapter 48.24 RCW)
- Employer groups need at least two employees at issue. Amounts follow a plan that prevents individual selection (RCW 48.24.020(3)).
- A noncontributory employer policy must insure all eligible employees, except those whose evidence of insurability isn't satisfactory (RCW 48.24.020(2)).
- Associations:
- must have existed at least one year
- must have a constitution and bylaws
- must be organized for purposes other than buying insurance (RCW 48.24.045)
- Union groups:
- need at least 25 members at issue
- need 75% participation if members contribute
- can't have a plan paid entirely by members' own specific contributions (RCW 48.24.050)
- Dependent coverage on a spouse or other family member can't exceed the amount on the employee's or member's life (RCW 48.24.030).
Required group life provisions
| Provision | Washington rule |
|---|---|
| Grace period (RCW 48.24.110) | 31 days. Coverage continues unless the policyholder gave advance written notice of discontinuance. |
| Incontestability (RCW 48.24.120) | A person's statement can't be used to contest their coverage unless it is in a written instrument they signed, and can't be used once their coverage has been in force two years during their lifetime. |
| Certificates (RCW 48.24.170) | Each insured gets a certificate stating the coverage, the beneficiary and the conversion rights. |
| Reduction at older ages (RCW 48.24.210(2)) | Coverage over $1,000 may be reduced, but not below $1,000, at an age of at least 65. |
Conversion (RCW 48.24.180 to 48.24.200)
- When employment or membership ends, the person may convert to an individual policy, other than term, without evidence of insurability. They apply within 31 days.
- When the group policy ends, a person insured at least five years may convert. The amount may be capped at the smaller of the lost coverage or $2,000.
- Death during the conversion period: the amount the person could have converted is paid as a claim, even if they never applied.
Variable life
- Variable life and variable annuities need the variable line of authority plus a securities salesperson license from the Department of Financial Institutions, through a FINRA member broker-dealer (WAC 284-17-015).
- Washington's life buyer's guide and illustration rules don't apply to variable life (WAC 284-23-210; RCW 48.23A.010).
- The guaranty association doesn't cover the portion of a policy where the owner bears the investment risk (RCW 48.32A.025(2)(b)).
Common exam traps
- An employer group needs at least 2 employees. A union group needs 25 members.
- Noncontributory group life covers all eligible employees. A contributory union plan needs 75%.
- Dependent coverage can't exceed the employee's own amount.
- Group life grace is 31 days, and the conversion window is 31 days with no term option.
- Conversion when the group policy ends needs five years of coverage and may be capped at $2,000.
- Variable products need a securities license as well as the variable line.
Practice Types of Life Insurance Policies questions All Life, Accident & Health 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.
