South Dakota Life Insurance Policy Requirements

South Dakota law imposes specific requirements on life insurance policies sold in the state under Title 58 of the South Dakota Codified Laws. The insurance code was established in 1966 as a comprehensive regulatory framework.

Free Look Period

South Dakota provides a standard free look period for life insurance:

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

Exam Tip: South Dakota's 10-day free look for life insurance follows the standard period used in most states.

Incontestability Clause

South Dakota 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
• If policy is reinstated, a new contestability period may apply (Section 58-15-68)
• Protects beneficiaries from denied claims due to application errors

Related Provisions

• Section 58-15-11: Exclusions unaffected by incontestability clause
• Section 58-15-61: Incontestability in annuity/endowment contracts

Suicide Clause

South Dakota 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 period may apply

Grace Period Requirements

South Dakota mandates grace periods for premium payments:

During the grace period:

• Policy remains in full force
• Death benefits are payable (minus unpaid premium)
• Policy lapses at end of grace period if premium not paid

Exam Tip: South Dakota's grace period is 30 days or 4 weeks, depending on premium payment frequency.

Beneficiary Protections

South Dakota has specific beneficiary protection laws:

Creditor Protection

Under South Dakota law:

• Life insurance proceeds payable to a named beneficiary may be protected from creditors
• Cash surrender values may have limited protection
• Proceeds payable to the estate are subject to creditor claims

Beneficiary Designation

• Policyowner has the right to change beneficiary unless irrevocably designated
• Changes must be made in writing
• Change is effective when received by the insurer

Policy Delivery Requirements

South Dakota requires:

• Policy delivered within reasonable time of issue
• Delivery must include policy and required disclosures
• Receipt should be obtained

Required Policy Provisions

Under South Dakota law, life insurance policies must include: