Nevada Life Insurance Policy Requirements

Nevada law imposes specific requirements on life insurance policies sold in the state under Title 57 of the Nevada Revised Statutes (NRS), particularly Chapter 688A. These requirements protect consumers and ensure policy standardization.

Regulatory Authority

The Nevada Division of Insurance (DOI), part of the Department of Business and Industry, regulates all insurance activities in the state:

• Headed by the Commissioner of Insurance (appointed by the Governor)
• Reviews and approves policy forms
• Licenses insurance producers
• Investigates consumer complaints
• Enforces insurance laws and regulations

Free Look Period

Nevada provides a free look period for life insurance:

During the free look period, the policyholder can:

• Review the policy
• Return it for a full refund of premiums paid
• No questions asked, no penalty

Exam Tip: Nevada provides a 10-day free look period for life insurance policies.

Incontestability Clause (NRS 688A.080)

Nevada 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: Nonpayment of premiums
• The clause precludes only a contest of the validity of the policy
• Does not preclude defenses based on coverage exclusions or restrictions

Nevada-Specific Rules

• Incontestability period begins from the date of issue
• If policy lapses and is reinstated, a new 2-year period begins
• At insurer's option, disability and accidental death provisions may be excepted

Suicide Clause

Nevada limits the suicide exclusion:

• Suicide exclusion cannot exceed 2 years from policy issue
• After 2 years, death by suicide is covered
• If policy is reinstated, new 2-year period may apply
• Benefits limited to return of premiums if death is within exclusion period

Beneficiary Protections

Nevada has specific beneficiary protection laws:

Unclaimed Life Insurance Benefits

Nevada requires insurers to:

• Cross-check policies against the Social Security Death Master File
• Make reasonable efforts to locate beneficiaries
• Initiate claims process when death is confirmed
• Cannot charge fees for locating beneficiaries

Unclaimed Property

If beneficiaries cannot be found:

• Death benefits are not forfeited
• Must be reported as unclaimed property to the state
• Beneficiaries can still claim from the state

Insurable Interest (NRS 687B.080)

Nevada requires insurable interest and consent for life insurance:

Who Has Insurable Interest?

STOLI Prohibition

Nevada prohibits Stranger-Originated Life Insurance (STOLI):

• Policies obtained with intent to transfer to parties without insurable interest
• Violates public policy against wagering on human life
• Policies may be voided if STOLI discovered
• Producers can face discipline for participating in STOLI schemes

Exam Tip: Insurable interest must exist at policy inception, not at the time of claim. Beneficiaries do not need insurable interest.

Policy Delivery Requirements

Nevada requires:

• Policy delivered within reasonable time of issue
• Delivery must include policy summary
• Receipt should be documented
• Electronic delivery permitted with consent

Grace Period (NRS 688A.060)

Nevada life insurance policies must include:

Reinstatement Rights

Nevada policyholders have reinstatement rights:

• May reinstate within 3 years of lapse
• Must provide evidence of insurability
• Must pay back premiums with interest
• New contestability period may begin

Standard Policy Provisions

Nevada requires these standard provisions in life insurance policies under NRS 688A:

Nonforfeiture Options

Nevada requires life insurance policies to include nonforfeiture options:

Minimum Nonforfeiture Values

Nevada follows the Standard Nonforfeiture Law:

• Cash values must meet minimum standards
• Based on commissioners' standard tables
• Values increase over policy duration
• Surrender charges limited and must be disclosed