Missouri Code of State Regulations
Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE
Division 400 - Life, Annuities and Health
Chapter 1 - Life Insurance and Annuity Standards
Section 20 CSR 400-1.040 - Policies Providing Graded Death Benefits
Universal Citation: 20 MO Code of State Regs 400-1.040
Current through Register Vol. 49, No. 6, March 15, 2024
PURPOSE: This rule provides notice to insurance applicants of all restrictions and limitations placed on life insurance policies which provide merely for return of premium accidental death benefits, or both, during early policy years. This rule was adopted pursuant to the provisions of section 374.045, RSMo and to implement section 376.675, RSMo.
(1) Scope.
(A) No life insurance policy providing graded
death benefits during early policy years shall be approved by this department
unless it complies with the standards set forth in this rule. No previously
approved policy form of this type may be issued in this state by any insurer
after December 26, 1974, unless the form complies with the standards set forth.
Policies of this type-
1. Shall be offered on
a guaranteed-issued basis or on liberal underwriting standards which justify
grading the death benefit during early policy years;
2. Shall provide accidental death benefits in
an amount not less than the face amount of the policy during the graded death
benefit period. This requirement shall not apply to those policies providing at
least fifty percent (50%) of the ultimate face amount as a first-year death
benefit;
3. Shall provide, in the
application, notice of the graded death benefit during early policy years and,
if applicable, notice of the accidental death benefit provided;
4. Shall contain, in the brief description
appearing on the face page and back page of the policy, a statement clearly
setting forth the graded death benefit feature and, if appropriate, the
accidental death benefit provided;
5. Shall contain, on the face, a prominently
displayed statement reading in substance: "Read Your Policy Carefully. If Yo u
Are Not Satisfied, Return the Policy Within Thirty (30) Days of Its Receipt For
a Full Premium Refund." Nothing shall prohibit a company from allowing more
than thirty (30) days for return of a policy as long as the provision is in
writing on the face page of the policy;
6. Shall not grade, with respect to issue
ages up to and including age sixty-five (65), the death benefit in excess of
three (3) years unless the policy provides at least fifty percent (50%) of the
ultimate face amount as a first-year death benefit;
7. Shall not grade, with respect to issue
ages sixty-six to seventy-five (66-75) inclusive, the death benefit in excess
of two (2) years unless the policy provides at least fifty percent (50%) of the
ultimate face amount as a first-year death benefit. The two (2)-year period can
be extended to three (3) years if the death benefit during the third policy
year equals or exceeds sixty-five percent (65%) of the face amount;
and
8. Shall not be issued in this
state at ages seventy-six (76) and above, unless the policy provides at least
fifty percent (50%) of the ultimate face amount as a first-year death
benefit.
(B) Any notice
required by this section may be imprinted or rubber stamped clearly and legibly
in the proper place on the policy, application, or both.
(C) With respect to the ages specified in
paragraphs (1)(A)6.-8. of this rule, the ages may be increased by three (3)
years for policies issued on female lives if the company uses a three (3)-year
female age-setback in the calculation of rates and nonforfeiture values
applicable to female insureds.
(D)
Any previously approved policy form which fully complies with the standards
outlined in this rule, need not be revised and need not be resubmitted to this
department for approval.
(2) Exceptions.
(A) This rule shall not apply-
1. To life insurance policies issued in
connection with an employer-sponsored insurance, pension or profit-sharing
plan, including plans which cover self-employed individuals and
owner-employees;
2. Where reduced
benefits during yearly policy years, primarily in Jumping Juvenile or Juvenile
Estate policies, are an inherent feature of the plan of insurance;
3. To term insurance policies which
automatically convert to a permanent plan of insurance for an increased amount
at a specified age; and
4. To
policies providing a gradation of death benefits applicable only for the period
prior to attained age five (5).
*Original authority: 374.045, RSMo 1967 and 376.675, RSMo 1963, amended 1984.
Disclaimer: These regulations may not be the most recent version. Missouri may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.