Key Takeaways
- Iowa requires a 10-day free look period for standard life insurance policies
- Life insurance policies must include a 2-year incontestability clause under Iowa law
- Suicide exclusion in Iowa is limited to 2 years from policy issue date
- Iowa requires a 31-day grace period for premium payments
- The Iowa Insurance Division regulates all life insurance
Iowa Life Insurance Policy Requirements
Iowa law imposes specific requirements on life insurance policies sold in the state. The Iowa Insurance Division regulates life insurance to protect consumers.
Regulatory Authority
The Iowa Insurance Division:
- Licenses insurance producers
- Approves policy forms and rates
- Investigates complaints
- Enforces insurance laws
- Examines insurer financial condition
Free Look Period
Iowa provides a standard free look period for life insurance:
| Policy Type | Free Look Period |
|---|---|
| Standard Life Policy | 10 days |
| Replacement Policy | 10 days |
| Long-Term Care | 30 days |
| Annuities | 10 days |
During the free look period, the policyholder can:
- Review the policy thoroughly
- Return it for a full refund of premiums paid
- No questions asked, no penalty charged
Exam Tip: Iowa uses the standard 10-day free look period. Long-term care insurance has an extended 30-day free look.
Incontestability Clause
Iowa requires a 2-year incontestability clause in all life insurance policies:
- After 2 years from issue, the insurer cannot contest the policy based on misstatements
- Exceptions: Fraud, non-payment of premiums
- The clause protects beneficiaries from claim denials due to application errors
Suicide Clause
Iowa limits the suicide exclusion:
- Suicide exclusion cannot exceed 2 years from policy issue
- After 2 years, death by suicide is covered at full face value
- If policy is reinstated, a new 2-year period may apply
Standard Policy Provisions
Iowa requires life insurance policies to include specific provisions:
Required Provisions
| Provision | Requirement |
|---|---|
| Grace Period | Minimum 31 days for premium payment |
| Entire Contract | Policy and application constitute entire contract |
| Misstatement of Age | Adjustment of benefits rather than voidance |
| Reinstatement | Right to reinstate within 3 years if lapsed |
| Policy Loan | Available for cash value policies |
| Nonforfeiture Options | Required for cash value policies |
Grace Period Details
- 31 days minimum grace period for premium payments
- Coverage continues during grace period
- Policy cannot be canceled for non-payment until grace period expires
- Death benefits paid minus any overdue premium if insured dies during grace period
Nonforfeiture Options
Iowa requires cash value life insurance to offer nonforfeiture options:
| Option | Description |
|---|---|
| Cash Surrender | Receive cash value minus any loans |
| Reduced Paid-Up | Continue coverage at reduced amount |
| Extended Term | Same face amount for limited period |
Beneficiary Protections
Iowa has specific beneficiary protection laws:
- Death benefits must be paid promptly upon valid claim
- Interest accrues if payment is delayed
- Insurers must act in good faith to locate beneficiaries
How long is the free look period for a standard life insurance policy in Iowa?
What agency regulates insurance in Iowa?
What is the minimum grace period for life insurance premium payments in Iowa?