N.Y. ISC Law § 3215 — New York Code / Act ISC / Article 32 / Section 3215
Disability benefits in connection with life insurance and annuities
Status: in_force

§ 3215. Disability benefits in connection with life insurance and\nannuities.  (a) No policy of life insurance or contract of deferred\nannuity, which provides benefits by reason of the disability of the\ninsured, including waiver of premium, shall be delivered or issued for\ndelivery in this state unless it contains in substance the following\nprovisions or provisions which in the opinion of the superintendent are\nmore favorable to policyholders:\n  (1) That disability benefits be paid or allowed only in case of total\ndisability and defining total disability in either of the following\nforms:\n  (A) Total disability is incapacity of the insured, resulting from\ninjury or disease, to engage in any occupation for remuneration or\nprofit. Such a policy shall be known and described as a "total\ndisability" policy or contract.\n  (B) Total disability, shall exist whenever the insured's average\nmonthly earned income for a period of four months next preceding has, as\na result of the insured's injury or disease, not exceeded one-fourth of\nhis former earned income averaged monthly for a period (next preceding\nsaid four months) which shall be prescribed in the policy and shall be\nnot less than twelve months.  Such a policy shall be known and described\nas an "earned income disability" policy or contract.\n  (2) That disability benefits will be paid or allowed only in case such\ntotal disability is also permanent as defined in either of the following\nforms:\n  (A) If such policy is a total disability policy, as defined in\nparagraph one hereof, a provision that total disability which has been\ncontinuous for a period specified in the contract, and which shall be\nnot less than four months nor more than one year, shall be deemed to be\npermanent only with respect to determining the commencement of\ndisability benefits.\n  (B) If such policy is an earned income disability policy, as defined\nin paragraph one hereof, a provision that total disability shall be\ndeemed to continue as long as the insured's earned monthly income shall,\nas a result of injury or disease, not exceed one-fourth of his average\nmonthly earned income as determined at the commencement of total\ndisability.\n  (3) That written notice of claim be given to the insurer during the\nlifetime of the insured and during the period of total disability.\nFailure to give such notice shall not invalidate or reduce any claim if\nit shall be shown not to have been reasonably possible to give such\nnotice and that notice was given as soon as was reasonably possible.\n  (4) That there be reasonable requirements as to the time, method and\nform of proof of disability and as to the continuance of disability,\nincluding an examination of the insured by the insurer at reasonable\nintervals. Failure to furnish proof of disability within the time\nrequired shall not invalidate or reduce any claim if it was not\nreasonably possible to give proof within such time, provided such proof\nis furnished as soon as reasonably possible and in no event, except in\nthe absence of legal capacity, later than one year from the time proof\nis otherwise required.\n  (5) That the contract of disability insurance shall be incontestable\nafter it shall have been in force, during the lifetime of the insured\nand without the occurrence of total disability of the insured, for a\nperiod of three years from date of issue, except for nonpayment of\npremiums and except for the conditions of the contract relating to\nmilitary or naval service.\n  (b) Any provision in such policy or contract that total disability\nresulting from any specified cause shall be excluded from coverage,\nshall contain only the following exclusions:\n  (1) (A) a provision terminating disability coverage when the insured\nbecomes a member of the military, naval or air forces of any country at\nwar, declared or undeclared; or\n  (B) a provision terminating disability coverage when the insured\nbecomes a member of any auxiliary or civilian non-combatant unit serving\nwith the military, naval or air forces of any country at war, declared\nor undeclared; or\n  (C) a provision excluding from coverage disability commencing within\nfive years from the date of issue of the policy as a result of an act of\nwar or any act incident thereto, whether such war be declared or\nundeclared, provided such act takes place while the insured is outside\nthe geographical limits specified in the policy.\n  (2) A provision excluding from the coverage disability resulting from\naviation under conditions specified in the policy.\n  (3) A provision excluding from the coverage disability directly\nresulting from injuries wilfully and intentionally self-inflicted.\n  (c) No policy or contract shall contain any provision set forth in\nthis subsection, unless it conforms substantially to the following:\n  (1) Any provision excluding from the coverage disability resulting\nfrom disease or injury occurring before the date of issue of the policy\nor contract, except provisions excluding from the coverage a specific\ndisease or injury by name or description, shall be applicable only to\nsuch disability commencing not later than two years after date of issue.\n  (2) A provision for a reasonable adjustment of income disability\nbenefits if the aggregate monthly amount of such benefits payable to the\ninsured, under all contracts of insurance, exceeds a specified\npercentage not to exceed one hundred percent of the average monthly\nearned income of the insured as may be ascertained in any reasonable\nmanner.\n  (d) No such policy shall provide that the face amount of life\ninsurance shall be reduced because of any disability benefits paid,\nexcept that such policy may provide, in lieu of income payments, an\nannuity certain for a period of not more than ten years, the value of\nwhich at its inception shall be equal to the face amount of insurance,\nwith the provision that upon recovery such annuity shall cease and the\ninsurance shall be restored at a proportionate premium for an amount\nequal to the present value of the instalments not yet due.\n  (e) No such policy which provides income disability benefits shall\ncontain any provision whereby the income disability benefits shall\nexceed a monthly rate equal to one percent of the face amount of the\npolicy, such face amount not to include any additional benefits payable\nin case of accidental death and of any pure endowment benefits.\n  (f) No such contract which provides income disability benefits shall\ncontain any provision whereby monthly income disability benefits exceed\none-twelfth of the annual annuity which would ordinarily be payable\nthereunder at age seventy.\n  (g) The provisions of this section shall not apply to any group life\ninsurance policies or group annuity contracts.\n  (h) Within the meaning of this section:\n  (1) "waiver of premiums" includes refund of waived premiums, if paid;\n  (2) "income payments" means payments made monthly or at less frequent\nregular intervals in addition to waiver of premiums and to all benefits\notherwise provided by the contract;\n  (3) "disability benefits" means waiver of premiums, or both waiver of\npremium and income payments, whichever may be specified in the contract;\n  (4) "income disability benefits" means income payments contingent upon\ntotal disability of the insured.\n