New York Codes, Rules and Regulations
Title 11 - INSURANCE
Chapter III - Policy and Certificate Provisions
Subchapter A - Life, Accident and Health Insurance
Part 42 - Term Life Issuance And Renewal Restrictions; Nonforfeiture Values For Certain Life Insurance Policies
Subpart 42-1 - Term Life Issuance And Renewal Restrictions; Nonforfeiture Values For Certain Life Insurance Policies Issued On Or After November 22, 1995 And Before January 1, 2009
Section 42-1.4 - Term life insurance

Universal Citation: 11 NY Comp Codes Rules and Regs § 42-1.4

Current through Register Vol. 46, No. 39, September 25, 2024

(a) No policy of term life insurance shall be issued, renewed or continued beyond age 80 of the insured unless one of the following applies:

(1) both benefits and premium rates remain level after age 80;

(2) the entire premium cost is paid by the employer under an individual policy which utilizes a sex distinct mortality basis for premium rates and cost of insurance charges;

(3) the entire premium cost is paid by the employer under an individual policy which is issued as part of a qualified pension plan which does not permit assignment of the policy to the employee, and the policy utilizes a unisex mortality basis;

(4) the entire premium costs are paid from the policy's dividends or previously purchased paid-up additions or the entire cost of insurance charges are paid from additional amounts credited to the policy;

(5) the group policyholder pays the entire premium for all eligible lives covered under the group policy without any contribution from such eligible lives; or

(6) the group policyholder pays a portion of the premium for active employees aged 80 and older covered under a group policy issued to a group recognized under section 4216 (b)(1) of the Insurance Law.

(b) The requirements of this section apply to joint life policies. The age limitation on continuation of term coverage for a policy which provides a death benefit at the death of the first of the joint insureds shall be based on the age of the oldest joint insured. The age limitation for a policy which provides a death benefit at the death of the last joint insured shall be based on the age of the youngest joint insured.

(c) This section shall not apply to a joint life last to die policy if the term insurance component will be paid-up at age 100 based on a dividend scale interest rate two percent lower than the rate at the time of sale of the policy or such other rate approved by the superintendent.

(d) Notwithstanding subdivision (a) of this section, under a permanent plan of insurance that consists of a cash value policy, a term insurance component and a paid-up additions component or similar variable life insurance benefits designed to provide for replacement of the term insurance component by the crediting of dividends or additional amounts, which purchase paid-up life insurance or similar variable life insurance benefits, the term insurance component may be continued after age 80 only on a level premium decreasing death benefit basis. However, if one of the exceptions set forth in subdivision (a) of this section applies, the term insurance component may also be continued on an increasing premium basis after age 80.

(e) This section shall not apply to a permanent plan of insurance described in subdivision (d) of this section, if the ratio between the term insurance component and the base cash value component is no greater than one to one and the term component will be replaced by paid-up additions no later than the mid-way point of the premium paying period of the policy based upon the dividend scale existing at the time of sale or such other point in the premium paying period approved by the superintendent.

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