Policy Provisions Prohibited By Law

Question 1

It is prohibited in most states to have a contract with a provision:

Answer 1

Limiting the time for any legal action to be taken against an insurer to less than 1 year after the act (or lack of an act) occurs. The statute of limitations cannot be less than one year.

Allowing for the backdating of a policy for more than 6 months. If backdating is allowed, the insurer may only allow this for a maximum of 6 months.

For any settlement at maturity of less value than the amount insured by the policy, plus dividend additions, less any outstanding policy loans, loan interest, and unpaid premium.

For forfeiture of the policy for failure to repay any loan on the policy or to pay interest on the loan while the total indebtedness on the policy is less than the cash value of the policy.