215 ILCS 5/231.1
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XIV - Legal Reserve Life Insurance

 (from Ch. 73, par. 843.1)Sec. 231.1. Group Life Insurance Standard Provision. No policy of group  life insurance shall be delivered in this State unless it contains in substance  the following provisions, or provisions which in the opinion of the Director  are more favorable to the persons insured, or at least as favorable to the  persons insured and more favorable to the policyholder, provided, however,  (a) that provisions (F) to (K) inclusive shall not apply to policies insuring  the lives of debtors; (b) that the standard provisions  required for individual life insurance policies shall not apply to group  life insurance policies; and (c) that if the group life insurance policy  is on a plan of insurance other than the term plan, it shall contain a nonforfeiture  provision which in the opinion of the Director is equitable to the insured  persons and to the policyholder, but nothing herein shall be construed to  require that group life insurance policies contain the same nonforfeiture  provisions as are required for individual life insurance policies:(A) A provision that the policyholder is entitled to a grace period of  31 days for the payment of any premium due except the first, during which  grace period the death benefit coverage shall continue in force, unless  the policyholder shall have given the insurer written notice of discontinuance  in advance of the date of discontinuance and in accordance with the terms  of the policy.  The policy may provide that the policyholder shall be liable  to the insurer for the payment of a pro rata premium for the time the policy  was in force during such grace period.(B) A provision that validity of the policy shall not be contested, except  for nonpayment of premiums, after it has been in force for two years from  its date of issue; and that no statement made by any person insured under  the policy relating to his insurability shall be used in contesting the  validity of the insurance with respect to which such statement was made  after such insurance has been in force prior to the contest for a period  of two years during such person's lifetime nor unless it is contained in  a written instrument signed by him; provided, however, that no such provision  shall preclude the assertion at any time of defenses based upon provisions  in the policy which relate to eligibility for coverage.(C) A provision that a copy of the application, if any, of the policyholder  shall be attached to the policy when issued, and that all statements made by  the policyholder shall be deemed representations and not warranties, and  that no statement made by any person insured shall be used in any contest  unless a copy of the instrument containing the statement  is or has been furnished to such person or, in the event of death or incapacity  of the insured person, to his beneficiary or personal representative.(D) A provision setting forth the conditions, if any, under which the  insurer reserves the right to require a person eligible for insurance to  furnish evidence of individual insurability satisfactory to the insurer  as a condition to part or all of his coverage.(E) A provision specifying an equitable adjustment of premiums or of benefits  or of both to be made in the event the age of a person insured has been  misstated, such provision to contain a clear statement of the method of  adjustment to be made.(F) A provision that any sum becoming due by reason of the death of the  person insured shall be payable to the beneficiary designated by the person  insured, except that where the policy contains conditions pertaining to  family status the beneficiary may be the family member specified by the  policy terms, subject to the provisions of the policy in the event there  is no designated beneficiary, as to all or any part of such sum, living  at the death of the person insured, and subject to any right reserved by  the insurer in the policy and set forth in the certificate to pay at its  option a part of such sum not exceeding $2,000 to any person appearing to  the insurer to be equitably entitled thereto by reason of having incurred  funeral or other expenses incident to the last illness or death of the person insured.(G) A provision that the insurer will issue to the policyholder for delivery  to each person insured a certificate setting forth a statement as to the  insurance protection to which he is entitled, to whom the insurance benefits  are payable, a statement as to any dependent's coverage included in such  certificate, and the rights and conditions set forth in provisions (H),  (I), (J) and (K) following.(H) A provision that if the insurance, or any portion of it, on a person  covered under the policy or on the dependent of a person covered, ceases  because of termination of employment or of membership in the class or classes  eligible for coverage under the policy, such person shall be entitled to  have issued to him by the insurer, without evidence of insurability, an  individual policy of life insurance without disability or other supplementary  benefits, unless such right to convert such coverage was provided for  in the group policy and is applied for in the application for conversion,  provided that an application for the individual policy shall be made,  and the first premium paid to the insurer, within 31 days after such termination,  and provided further that:(1) the individual policy may, at the option of such     person, be on any one of the forms then customarily issued by the insurer at the age and for the amount applied for, except that the group policy may exclude the option to elect term insurance;(2) the individual policy shall be in an amount equal     to, unless such person chooses to elect a lesser amount, the amount of life insurance which ceases because of such termination, less the amount of any life insurance for which such person becomes eligible under the same or any other group policy within 31 days after such termination, provided that any amount of insurance which shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination; and(3) the premium on the individual policy shall be at     the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to such person's age attained on the effective date of the individual policy.(4) If any individual insured under a group life     insurance policy becomes entitled under the terms of such policy to have an individual policy of life insurance issued and if such individual is not given notice of the existence of such right at least 15 days prior to the expiration date of such period, then in such event the individual shall have an additional period within which to exercise such right, but nothing herein contained shall be construed to continue any insurance beyond the period provided in such policy.  This additional period shall expire 15 days next after the individual is given such notice but in no event shall such additional period extend beyond 60 days next after the expiration date of the period provided in such policy.  Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this Section.Subject to the same conditions set forth above the conversion privilege  shall be available (i) to a surviving dependent, if any, at the death of  the employee or member, with respect to the coverage under the group policy  which terminates by reason of such death and (ii) to the dependent of the  employee or member upon termination of coverage of the dependent, while  the employee or member remains under the group policy, by reason of the  dependent ceasing to be a qualified family member under the group policy.(I) A provision, except in the case of a policy described in paragraph  (B) of Section 230.1, that the termination of the employment of an employee  or the membership of a member shall not terminate the insurance of such  employee or member under the group policy until the expiration of such period  for which the premium for such employee or member has been paid, not exceeding 31 days.(J) A provision that from time to time all new employees or members eligible  for insurance and desiring the same shall be added to the group or class  thereof originally insured.(K) A provision that if the group policy terminates or is  amended so as to terminate the insurance of any class of insured persons,  every person insured thereunder at the date of such termination whose insurance  terminates, including the insured dependent of a covered person, and who  has been so insured for at least five years prior to such termination date shall be  entitled to have issued by the insurer an individual policy of life insurance,  subject to the same conditions and limitations as are provided by provision  (H) above, except that the group policy may provide that the amount of such  individual policy shall not exceed the smaller of (a) the amount of the  person's life insurance protection ceasing because of the termination or amendment of  the group policy, less the amount of any life insurance for which he is  or becomes eligible under a group policy issued or reinstated by the same  or another insurer within 31 days after such termination, or (b) $10,000.(L) A provision that if a person insured under the group policy, or the  insured dependent of a covered person, dies during the period within which  the individual would have been entitled to have an individual policy issued  in accordance with provisions (H) or (I) above and before such an individual  policy shall have become effective, the amount of life insurance which he  would have been entitled to have issued under such individual policy shall  be payable as a claim under the group policy, whether or not application  for the individual policy or the payment of the first premium therefor has been made.(M) If active employment is a condition of insurance, a provision  that an insured may continue coverage during the insured's total disability  by timely payment to the policyholder of that portion, if any, of the premium  that would have been required from the insured had total disability not  occurred.  The continuation shall be on a premium paying basis for a period  of six months from the date on which the total disability started, but not  beyond the earlier of (a) approval by the insurer of continuation of the  coverage under any disability provision which the group insurance policy  may contain or (b) the discontinuance of the group insurance policy.(N) In the case of a policy of group life insurance replacing another policy of group life insurance in force with another insurance carrier immediately prior to the effective date of the new policy, a provision preventing loss of coverage, subject to premium payments, for those active employees who are not actively at work on the effective date of the new policy if the following conditions are met:(1)   the active employee was insured under the prior     carrier's group life insurance policy immediately prior to the effective date of the policy;(2)   the active employee is not actively at work on     the effective date of the new policy;(3)   the active employee is a member of an eligible     class under the policy; and(4)   the active employee is not receiving or     eligible to receive benefits under the prior carrier's group life insurance policy.(O) In the case of a policy insuring the lives of debtors,  a provision that the insurer will furnish to the policyholder for delivery  to each debtor insured under the policy a certificate of insurance describing  the coverage and specifying that the death benefit shall first be applied  to reduce or extinguish the indebtedness. Whenever the amount of insurance  payable exceeds the amount of outstanding indebtedness the excess benefit  shall be payable to the person otherwise contractually or legally entitled  thereto; if there be no person determined to be so entitled, such excess  shall be paid to the estate of the insured person.   (Source: P.A. 102-367, eff. 1-1-22.)