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

Current through Register Vol. 49, No. 14, July 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.