2023 New York Laws › ISC - Insurance › Article 32 - Insurance Contracts - Life, Accident and Health, Annuities › 3215 - Disability Benefits in Connection With Life Insurance and Annuities.

§  3215.  Disability  benefits  in  connection with life insurance and
annuities.  (a) No policy of life  insurance  or  contract  of  deferred
annuity,  which  provides  benefits  by  reason of the disability of the
insured, including waiver of premium, shall be delivered or  issued  for
delivery  in  this  state  unless it contains in substance the following
provisions or provisions which in the opinion of the superintendent  are
more favorable to policyholders:
(1)  That disability benefits be paid or allowed only in case of total
disability and defining total disability  in  either  of  the  following
forms:
(A)  Total  disability  is  incapacity  of the insured, resulting from
injury or disease, to engage  in  any  occupation  for  remuneration  or
profit.  Such  a  policy  shall  be  known  and  described  as  a "total
disability" policy or contract.
(B) Total disability,  shall  exist  whenever  the  insured's  average
monthly earned income for a period of four months next preceding has, as
a  result of the insured's injury or disease, not exceeded one-fourth of
his former earned income averaged monthly for a period  (next  preceding
said  four  months) which shall be prescribed in the policy and shall be
not less than twelve months.  Such a policy shall be known and described
as an "earned income disability" policy or contract.
(2) That disability benefits will be paid or allowed only in case such
total disability is also permanent as defined in either of the following
forms:
(A) If such policy  is  a  total  disability  policy,  as  defined  in
paragraph  one  hereof, a provision that total disability which has been
continuous for a period specified in the contract, and  which  shall  be
not  less than four months nor more than one year, shall be deemed to be
permanent  only  with  respect  to  determining  the   commencement   of
disability benefits.
(B)  If  such policy is an earned income disability policy, as defined
in paragraph one hereof, a provision  that  total  disability  shall  be
deemed to continue as long as the insured's earned monthly income shall,
as  a  result of injury or disease, not exceed one-fourth of his average
monthly earned  income  as  determined  at  the  commencement  of  total
disability.
(3)  That  written  notice of claim be given to the insurer during the
lifetime of the insured and  during  the  period  of  total  disability.
Failure  to give such notice shall not invalidate or reduce any claim if
it shall be shown not to have been  reasonably  possible  to  give  such
notice and that notice was given as soon as was reasonably possible.
(4)  That  there be reasonable requirements as to the time, method and
form of proof of disability and as to  the  continuance  of  disability,
including  an  examination  of  the insured by the insurer at reasonable
intervals. Failure to  furnish  proof  of  disability  within  the  time
required  shall  not  invalidate  or  reduce  any  claim  if  it was not
reasonably possible to give proof within such time, provided such  proof
is  furnished  as soon as reasonably possible and in no event, except in
the absence of legal capacity, later than one year from the  time  proof
is otherwise required.
(5)  That  the contract of disability insurance shall be incontestable
after it shall have been in force, during the lifetime  of  the  insured
and  without  the  occurrence  of total disability of the insured, for a
period of three years from date  of  issue,  except  for  nonpayment  of
premiums  and  except  for  the  conditions  of the contract relating to
military or naval service.
(b) Any provision in such policy or  contract  that  total  disability
resulting  from  any  specified  cause  shall be excluded from coverage,
shall contain only the following exclusions:
(1)  (A)  a provision terminating disability coverage when the insured
becomes a member of the military, naval or air forces of any country  at
war, declared or undeclared; or
(B)  a  provision  terminating  disability  coverage  when the insured
becomes a member of any auxiliary or civilian non-combatant unit serving
with the military, naval or air forces of any country at  war,  declared
or undeclared; or
(C)  a  provision excluding from coverage disability commencing within
five years from the date of issue of the policy as a result of an act of
war or any act  incident  thereto,  whether  such  war  be  declared  or
undeclared,  provided  such act takes place while the insured is outside
the geographical limits specified in the policy.
(2) A provision excluding from the coverage disability resulting  from
aviation under conditions specified in the policy.
(3)  A  provision  excluding  from  the  coverage  disability directly
resulting from injuries wilfully and intentionally self-inflicted.
(c) No policy or contract shall contain any  provision  set  forth  in
this subsection, unless it conforms substantially to the following:
(1)  Any  provision  excluding  from the coverage disability resulting
from disease or injury occurring before the date of issue of the  policy
or  contract,  except  provisions excluding from the coverage a specific
disease or injury by name or description, shall be  applicable  only  to
such disability commencing not later than two years after date of issue.
(2)  A  provision  for  a  reasonable  adjustment of income disability
benefits if the aggregate monthly amount of such benefits payable to the
insured,  under  all  contracts  of  insurance,  exceeds   a   specified
percentage  not  to  exceed  one  hundred percent of the average monthly
earned income of the insured as may be  ascertained  in  any  reasonable
manner.
(d)  No  such  policy  shall  provide  that  the  face  amount of life
insurance shall be reduced because  of  any  disability  benefits  paid,
except  that  such  policy  may  provide, in lieu of income payments, an
annuity certain for a period of not more than ten years,  the  value  of
which  at  its inception shall be equal to the face amount of insurance,
with the provision that upon recovery such annuity shall cease  and  the
insurance  shall  be  restored  at a proportionate premium for an amount
equal to the present value of the instalments not yet due.
(e) No such policy which provides  income  disability  benefits  shall
contain  any  provision  whereby  the  income  disability benefits shall
exceed a monthly rate equal to one percent of the  face  amount  of  the
policy,  such face amount not to include any additional benefits payable
in case of accidental death and of any pure endowment benefits.
(f) No such contract which provides income disability  benefits  shall
contain  any provision whereby monthly income disability benefits exceed
one-twelfth of the annual annuity  which  would  ordinarily  be  payable
thereunder at age seventy.
(g)  The  provisions of this section shall not apply to any group life
insurance policies or group annuity contracts.
(h) Within the meaning of this section:
(1) "waiver of premiums" includes refund of waived premiums, if paid;
(2) "income payments" means payments made monthly or at less  frequent
regular  intervals in addition to waiver of premiums and to all benefits
otherwise provided by the contract;
(3) "disability benefits" means waiver of premiums, or both waiver  of
premium and income payments, whichever may be specified in the contract;
(4) "income disability benefits" means income payments contingent upon
total disability of the insured.