Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-420.Contents of insurance policy; exceptions.No life insurance company authorized to transact the business ofinsurance in this state shall issue or deliver in this state any policyof life insurance other than industrial insurance, annuities and pureendowments with or without return of premiums or of premiums andinterest unless the same shall contain in substance the followingprovisions:
(1) A provision that all premiums after the first shall be payablein advance, either at the home office of the company or to an agent ofthe company, and that the insured is entitled to a grace period of notless than 30 days within which time the payment of any premium afterthe first may be made, during which period of grace the policy shallcontinue in full force. In case the policy becomes a claim during thegrace period, the amount of any overdue premium and any remaining unpaidinstallments of the annual premium for the policy year of death may bededucted in any settlement under the policy.
(2) A provision that, except as otherwise expressly provided by law,the policy together with the application, if a copy thereof be endorsedupon or attached to the policy, shall constitute the entire contractbetween the parties and shall be incontestable after it has been inforce during the lifetime of the insured for a period of not more thantwo years from its date, except for nonpayment of premiums and exceptfor violations of the conditions, if any, relating to naval or militaryservice, or to aeronautics and, except also at the option of thecompany, with respect to provisions relative to benefits in the event oftotal and permanent disability and provisions which grant additionalinsurance specifically against death by accident or by accidental means;that all statements made by the insured shall, in the absence of fraud,be deemed representations and not warranties; and that no such statementor statements shall be used in defense of a claim under the policyunless contained in a written application, and unless a copy of suchstatement or statements be endorsed upon or attached to the policy whenissued.
(3) A provision that if it shall be found at any time before finalsettlement under the policy, that the age of the insured or the age ofany other person considered in determining the premium has beenmisstated, the amount payable under the policy shall be such as thepremium would have purchased at the correct age or ages, according tothe company's published rate at date of issue.
(4) A provision that the policy shall participate in the surplus ofthe company, and any policy containing provision for the payment of adividend at the end of the first or second policy year, and annuallythereafter, may also provide that the dividends payable at the end ofthe first and second policy year shall be paid subject to the payment ofthe premiums for the next ensuing year; and the insured under any annualdividend policy shall have the right each year to have the dividendarising from such participation paid in cash, and if the policy shallprovide other dividend options, it shall further provide which of theoptions shall be effective if the insured shall not elect any such otheroption on or before the expiration of the period of grace allowed forthe payment of the premium. This provision shall not apply to any formof paid-up insurance, temporary insurance or pure endowment insurance,issued or granted in exchange for lapsed or surrendered policies, or tononparticipating policies.
(5) Except as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, a provision that after the premium shall have beenpaid forthree years, the company at any time, while the policy is in force, willadvance, on proper assignment or pledge of the policy and on the solesecurity thereof, at a specified rate of interest not to exceed 8% per annum,a sum equal to, or at the option of the insuredless than, the amount required by K.S.A. 40-429, and amendments thereto,under the conditionsspecified thereby; and that the company will deduct from such loan valueany existing indebtedness on the policy not already deducted indetermining such value and any unpaid balance of the premium for thecurrent policy year, and may collect interest in advance on the loan tothe end of the current policy year. This provision shall not be requiredin term insurance, nor shall it apply to temporary insurance or pureendowment insurance, issued or granted in exchange for lapsed orsurrendered policies. The policy may further provide that if theinterest on the loan is not paid when due, it shall be added to theexisting loan, and shall bear interest at the same rate.
(6) A provision for nonforfeiture benefits and cash surrender valuesin accordance with the requirements of subsection (a) of K.S.A. 40-427,or K.S.A. 40-428, and amendments thereto.
(7) A provision specifying the options to which the policyholder isentitled in the event of default in a premium payment.
(8) A table showing in figures the loan values and the optionsavailable under the policy each year upon default in premium paymentsduring at least the first 20 years of the policy, or during thepremium-paying period if less than 20 years.
(9) A provision that if in event of default in premium payments thevalue of the policy shall have been applied to the purchase of otherinsurance as provided in this section, and if such insurance shall be inforce and the original policy shall not have been surrendered to thecompany and canceled, the policy may be reinstated within three yearsfrom such default, upon evidence of insurability satisfactory to thecompany and payment of arrears of premiums and the payment orreinstatement of any other indebtedness to the company upon its policy,with interest on its premium at the rate of notexceeding 6% per annum payable annually and with interest on the indebtednessat a rate as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, and that suchreinstated policy shall be contestable only on account of fraud ormisrepresentation of material facts pertaining to the reinstatement; forthe same period of time after reinstatement as provided in the policywith respect to original issue.
(10) A provision that when a policy shall become a claim by thedeath of the insured, settlement shall be made upon receipt of due proofof death.
(11) A table showing the amount of installments, if any, in whichthe policy may provide its proceeds may be payable.
(12) Title on the face and on the back of the policy, brieflydescribing its form.
(13) A provision with respect to the company's obligation to refundunearned premiums upon cancellation of a term life insurance policy as definedinaccordance with the requirements of K.S.A. 40-419a, and amendmentsthereto, except this provision isrequired to beprinted only in term life insurance policies with an original issue date afterthe effective date of this act.
Any of the foregoing provisions or portions thereof not applicable tosingle-premium or nonparticipating or term policies shall to that extentnot be incorporated therein; and any such policy may be issued ordelivered in this state which in the opinion of the insurancecommissioner contains provisions on any one or more of the severalforegoing requirements more favorable to the policyholder thanhereinbefore required. The provisions of this section shall not apply topolicies of reinsurance, or to policies issued or granted in exchangefor lapsed or surrendered policies, or to policies of group insurance.
History: L. 1927, ch. 231, 40-420; L. 1939, ch. 209, § 1; L. 1947,ch. 277, §2; L. 1978, ch. 176, § 1; L. 1982, ch. 203, § 5;L. 1991, ch. 131, § 2; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-420.Contents of insurance policy; exceptions.No life insurance company authorized to transact the business ofinsurance in this state shall issue or deliver in this state any policyof life insurance other than industrial insurance, annuities and pureendowments with or without return of premiums or of premiums andinterest unless the same shall contain in substance the followingprovisions:
(1) A provision that all premiums after the first shall be payablein advance, either at the home office of the company or to an agent ofthe company, and that the insured is entitled to a grace period of notless than 30 days within which time the payment of any premium afterthe first may be made, during which period of grace the policy shallcontinue in full force. In case the policy becomes a claim during thegrace period, the amount of any overdue premium and any remaining unpaidinstallments of the annual premium for the policy year of death may bededucted in any settlement under the policy.
(2) A provision that, except as otherwise expressly provided by law,the policy together with the application, if a copy thereof be endorsedupon or attached to the policy, shall constitute the entire contractbetween the parties and shall be incontestable after it has been inforce during the lifetime of the insured for a period of not more thantwo years from its date, except for nonpayment of premiums and exceptfor violations of the conditions, if any, relating to naval or militaryservice, or to aeronautics and, except also at the option of thecompany, with respect to provisions relative to benefits in the event oftotal and permanent disability and provisions which grant additionalinsurance specifically against death by accident or by accidental means;that all statements made by the insured shall, in the absence of fraud,be deemed representations and not warranties; and that no such statementor statements shall be used in defense of a claim under the policyunless contained in a written application, and unless a copy of suchstatement or statements be endorsed upon or attached to the policy whenissued.
(3) A provision that if it shall be found at any time before finalsettlement under the policy, that the age of the insured or the age ofany other person considered in determining the premium has beenmisstated, the amount payable under the policy shall be such as thepremium would have purchased at the correct age or ages, according tothe company's published rate at date of issue.
(4) A provision that the policy shall participate in the surplus ofthe company, and any policy containing provision for the payment of adividend at the end of the first or second policy year, and annuallythereafter, may also provide that the dividends payable at the end ofthe first and second policy year shall be paid subject to the payment ofthe premiums for the next ensuing year; and the insured under any annualdividend policy shall have the right each year to have the dividendarising from such participation paid in cash, and if the policy shallprovide other dividend options, it shall further provide which of theoptions shall be effective if the insured shall not elect any such otheroption on or before the expiration of the period of grace allowed forthe payment of the premium. This provision shall not apply to any formof paid-up insurance, temporary insurance or pure endowment insurance,issued or granted in exchange for lapsed or surrendered policies, or tononparticipating policies.
(5) Except as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, a provision that after the premium shall have beenpaid forthree years, the company at any time, while the policy is in force, willadvance, on proper assignment or pledge of the policy and on the solesecurity thereof, at a specified rate of interest not to exceed 8% per annum,a sum equal to, or at the option of the insuredless than, the amount required by K.S.A. 40-429, and amendments thereto,under the conditionsspecified thereby; and that the company will deduct from such loan valueany existing indebtedness on the policy not already deducted indetermining such value and any unpaid balance of the premium for thecurrent policy year, and may collect interest in advance on the loan tothe end of the current policy year. This provision shall not be requiredin term insurance, nor shall it apply to temporary insurance or pureendowment insurance, issued or granted in exchange for lapsed orsurrendered policies. The policy may further provide that if theinterest on the loan is not paid when due, it shall be added to theexisting loan, and shall bear interest at the same rate.
(6) A provision for nonforfeiture benefits and cash surrender valuesin accordance with the requirements of subsection (a) of K.S.A. 40-427,or K.S.A. 40-428, and amendments thereto.
(7) A provision specifying the options to which the policyholder isentitled in the event of default in a premium payment.
(8) A table showing in figures the loan values and the optionsavailable under the policy each year upon default in premium paymentsduring at least the first 20 years of the policy, or during thepremium-paying period if less than 20 years.
(9) A provision that if in event of default in premium payments thevalue of the policy shall have been applied to the purchase of otherinsurance as provided in this section, and if such insurance shall be inforce and the original policy shall not have been surrendered to thecompany and canceled, the policy may be reinstated within three yearsfrom such default, upon evidence of insurability satisfactory to thecompany and payment of arrears of premiums and the payment orreinstatement of any other indebtedness to the company upon its policy,with interest on its premium at the rate of notexceeding 6% per annum payable annually and with interest on the indebtednessat a rate as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, and that suchreinstated policy shall be contestable only on account of fraud ormisrepresentation of material facts pertaining to the reinstatement; forthe same period of time after reinstatement as provided in the policywith respect to original issue.
(10) A provision that when a policy shall become a claim by thedeath of the insured, settlement shall be made upon receipt of due proofof death.
(11) A table showing the amount of installments, if any, in whichthe policy may provide its proceeds may be payable.
(12) Title on the face and on the back of the policy, brieflydescribing its form.
(13) A provision with respect to the company's obligation to refundunearned premiums upon cancellation of a term life insurance policy as definedinaccordance with the requirements of K.S.A. 40-419a, and amendmentsthereto, except this provision isrequired to beprinted only in term life insurance policies with an original issue date afterthe effective date of this act.
Any of the foregoing provisions or portions thereof not applicable tosingle-premium or nonparticipating or term policies shall to that extentnot be incorporated therein; and any such policy may be issued ordelivered in this state which in the opinion of the insurancecommissioner contains provisions on any one or more of the severalforegoing requirements more favorable to the policyholder thanhereinbefore required. The provisions of this section shall not apply topolicies of reinsurance, or to policies issued or granted in exchangefor lapsed or surrendered policies, or to policies of group insurance.
History: L. 1927, ch. 231, 40-420; L. 1939, ch. 209, § 1; L. 1947,ch. 277, §2; L. 1978, ch. 176, § 1; L. 1982, ch. 203, § 5;L. 1991, ch. 131, § 2; July 1.
Article 4.--GENERAL PROVISIONS RELATING TO LIFE INSURANCE COMPANIES
40-420.Contents of insurance policy; exceptions.No life insurance company authorized to transact the business ofinsurance in this state shall issue or deliver in this state any policyof life insurance other than industrial insurance, annuities and pureendowments with or without return of premiums or of premiums andinterest unless the same shall contain in substance the followingprovisions:
(1) A provision that all premiums after the first shall be payablein advance, either at the home office of the company or to an agent ofthe company, and that the insured is entitled to a grace period of notless than 30 days within which time the payment of any premium afterthe first may be made, during which period of grace the policy shallcontinue in full force. In case the policy becomes a claim during thegrace period, the amount of any overdue premium and any remaining unpaidinstallments of the annual premium for the policy year of death may bededucted in any settlement under the policy.
(2) A provision that, except as otherwise expressly provided by law,the policy together with the application, if a copy thereof be endorsedupon or attached to the policy, shall constitute the entire contractbetween the parties and shall be incontestable after it has been inforce during the lifetime of the insured for a period of not more thantwo years from its date, except for nonpayment of premiums and exceptfor violations of the conditions, if any, relating to naval or militaryservice, or to aeronautics and, except also at the option of thecompany, with respect to provisions relative to benefits in the event oftotal and permanent disability and provisions which grant additionalinsurance specifically against death by accident or by accidental means;that all statements made by the insured shall, in the absence of fraud,be deemed representations and not warranties; and that no such statementor statements shall be used in defense of a claim under the policyunless contained in a written application, and unless a copy of suchstatement or statements be endorsed upon or attached to the policy whenissued.
(3) A provision that if it shall be found at any time before finalsettlement under the policy, that the age of the insured or the age ofany other person considered in determining the premium has beenmisstated, the amount payable under the policy shall be such as thepremium would have purchased at the correct age or ages, according tothe company's published rate at date of issue.
(4) A provision that the policy shall participate in the surplus ofthe company, and any policy containing provision for the payment of adividend at the end of the first or second policy year, and annuallythereafter, may also provide that the dividends payable at the end ofthe first and second policy year shall be paid subject to the payment ofthe premiums for the next ensuing year; and the insured under any annualdividend policy shall have the right each year to have the dividendarising from such participation paid in cash, and if the policy shallprovide other dividend options, it shall further provide which of theoptions shall be effective if the insured shall not elect any such otheroption on or before the expiration of the period of grace allowed forthe payment of the premium. This provision shall not apply to any formof paid-up insurance, temporary insurance or pure endowment insurance,issued or granted in exchange for lapsed or surrendered policies, or tononparticipating policies.
(5) Except as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, a provision that after the premium shall have beenpaid forthree years, the company at any time, while the policy is in force, willadvance, on proper assignment or pledge of the policy and on the solesecurity thereof, at a specified rate of interest not to exceed 8% per annum,a sum equal to, or at the option of the insuredless than, the amount required by K.S.A. 40-429, and amendments thereto,under the conditionsspecified thereby; and that the company will deduct from such loan valueany existing indebtedness on the policy not already deducted indetermining such value and any unpaid balance of the premium for thecurrent policy year, and may collect interest in advance on the loan tothe end of the current policy year. This provision shall not be requiredin term insurance, nor shall it apply to temporary insurance or pureendowment insurance, issued or granted in exchange for lapsed orsurrendered policies. The policy may further provide that if theinterest on the loan is not paid when due, it shall be added to theexisting loan, and shall bear interest at the same rate.
(6) A provision for nonforfeiture benefits and cash surrender valuesin accordance with the requirements of subsection (a) of K.S.A. 40-427,or K.S.A. 40-428, and amendments thereto.
(7) A provision specifying the options to which the policyholder isentitled in the event of default in a premium payment.
(8) A table showing in figures the loan values and the optionsavailable under the policy each year upon default in premium paymentsduring at least the first 20 years of the policy, or during thepremium-paying period if less than 20 years.
(9) A provision that if in event of default in premium payments thevalue of the policy shall have been applied to the purchase of otherinsurance as provided in this section, and if such insurance shall be inforce and the original policy shall not have been surrendered to thecompany and canceled, the policy may be reinstated within three yearsfrom such default, upon evidence of insurability satisfactory to thecompany and payment of arrears of premiums and the payment orreinstatement of any other indebtedness to the company upon its policy,with interest on its premium at the rate of notexceeding 6% per annum payable annually and with interest on the indebtednessat a rate as provided in K.S.A. 40-420a through 40-420d, inclusive,and amendments thereto, and that suchreinstated policy shall be contestable only on account of fraud ormisrepresentation of material facts pertaining to the reinstatement; forthe same period of time after reinstatement as provided in the policywith respect to original issue.
(10) A provision that when a policy shall become a claim by thedeath of the insured, settlement shall be made upon receipt of due proofof death.
(11) A table showing the amount of installments, if any, in whichthe policy may provide its proceeds may be payable.
(12) Title on the face and on the back of the policy, brieflydescribing its form.
(13) A provision with respect to the company's obligation to refundunearned premiums upon cancellation of a term life insurance policy as definedinaccordance with the requirements of K.S.A. 40-419a, and amendmentsthereto, except this provision isrequired to beprinted only in term life insurance policies with an original issue date afterthe effective date of this act.
Any of the foregoing provisions or portions thereof not applicable tosingle-premium or nonparticipating or term policies shall to that extentnot be incorporated therein; and any such policy may be issued ordelivered in this state which in the opinion of the insurancecommissioner contains provisions on any one or more of the severalforegoing requirements more favorable to the policyholder thanhereinbefore required. The provisions of this section shall not apply topolicies of reinsurance, or to policies issued or granted in exchangefor lapsed or surrendered policies, or to policies of group insurance.
History: L. 1927, ch. 231, 40-420; L. 1939, ch. 209, § 1; L. 1947,ch. 277, §2; L. 1978, ch. 176, § 1; L. 1982, ch. 203, § 5;L. 1991, ch. 131, § 2; July 1.
