2.1 Louisiana Life Insurance Policy Requirements

Why These Provisions Exist

Louisiana Revised Statutes (LA R.S.) Title 22 is the insurance code, and section 22:931 lists the standard provisions that must appear in every individual life policy delivered or issued for delivery in the state. The Louisiana Department of Insurance (LDI), headed by the elected Commissioner of Insurance, reviews policy forms and enforces these mandates. On the exam, roughly one-quarter of state-law questions test whether you can recall the exact number attached to each provision, so memorize the figures below cold.

Free Look Period

The free look period (also called the right-to-examine period) lets a buyer return a delivered policy for a full premium refund, no questions asked. The clock starts on the date the policyholder receives the policy, not the application date.

Exam Tip: The single most-tested Louisiana fact is that the standard free look is 10 days, but it doubles to 20 days when the sale is a replacement OR the buyer is 65 or older. A 67-year-old buying a brand-new (non-replacement) policy still gets 20 days because of age.

Incontestability Clause

The incontestability clause bars the insurer from voiding the policy or denying a claim based on misstatements in the application after the policy has been in force for 2 years during the insured's lifetime.

• The 2-year clock runs from the issue date.
• After 2 years, even a material misrepresentation cannot be used to contest the policy.
• Exceptions that survive forever: fraud in obtaining the policy (in some courts), nonpayment of premium, and the absence of an insurable interest at inception. Age/sex misstatement is handled by adjustment, not contest.
• If a lapsed policy is reinstated, a fresh contestable period applies to statements made in the reinstatement application.

Suicide Clause

Louisiana caps the suicide exclusion at 2 years from issue. If the insured dies by suicide within the exclusion period, the insurer's only obligation is to refund the premiums paid (not the death benefit). After the period ends, suicide is covered like any other cause of death. A reinstatement may restart the suicide period on the same terms as the original contract.

Misstatement of Age or Sex

If the application understates or overstates the insured's age or sex, the insurer does not void the policy. Instead it adjusts the death benefit to the amount the premium actually paid would have purchased at the correct age/sex. Example: a man stated as age 40 when he was truly 45 paid too little; the benefit is reduced to what the age-45 premium rate would buy.

Grace Period

Louisiana requires a 31-day grace period for premium payments on individual life policies, regardless of premium mode.

During the grace period the policy stays in force. If the insured dies before the overdue premium is paid, the insurer pays the full death benefit minus the unpaid premium. Worked example: a $200,000 policy with a $400 quarterly premium 18 days past due pays the beneficiary $200,000 − $400 = $199,600. Only after the 31 days expire without payment does the policy lapse (subject to any nonforfeiture option).

Other Required Standard Provisions

Beneficiary and Creditor Protections

• Life insurance proceeds and cash values are generally exempt from the insured's creditors under Louisiana law (LA R.S. 22:912), shielding the benefit for the named beneficiary.
• An irrevocable beneficiary cannot be changed without that beneficiary's written consent.
• If no beneficiary survives, proceeds go to the insured's estate unless a contingent beneficiary is named.

Louisiana Life & Health Insurance Guaranty Association (LLHIGA)

When a member insurer becomes insolvent, LLHIGA steps in up to statutory caps. Note the annuity and aggregate limits the prior version of this guide omitted:

Common Trap: A solvent insurer may not use LLHIGA membership as a sales inducement — advertising guaranty-fund protection to close a sale is a prohibited practice under LA R.S. 22:2098.