2.1 West Virginia Life Insurance Policy Requirements

The Regulator and the Statutory Framework

The Offices of the Insurance Commissioner (OIC) administers insurance in West Virginia. The Commissioner is appointed by the Governor, enforces West Virginia Code Chapter 33, and adopts legislative rules in Title 114 of the Code of State Rules. Two layers matter on the exam: the statute (Chapter 33, passed by the Legislature) and the rule (Title 114, written by the OIC to implement the statute). When a question says "West Virginia law requires," it usually means Article 33-13, the standard-provisions article for ordinary life policies.

Mandatory provisions are minimums. An insurer may give the policyholder more than the statute requires (a 30-day free look, a 45-day grace period) but never less. A trap answer often shortens a number below the legal floor.

Free Look Period

The free look lets the owner cancel for a full refund of premium with no penalty. West Virginia layers two different periods by transaction type:

Note the replacement number. Under the Title 114 replacement rule, a policy issued by a replacing insurer may be surrendered within 30 days of delivery for a full refund — longer than the ordinary 10-day window, because the consumer is giving up an existing contract. Exam writers love to pair "replacement" with the 10-day distractor.

Incontestability

West Virginia requires a 2-year incontestability clause. After the policy has been in force for two years during the insured's lifetime, the insurer cannot void it or deny a claim for material misstatements on the application.

• Window: measured from issue, runs only while the insured is alive. A death in month 18 leaves a contestable claim even if the insurer investigates in month 30.
• Survives misstatement: even a materially false health answer becomes uncontestable after two years.
• Exceptions that never become incontestable: fraud in some courts, non-payment of premium, and a claim that the insured never existed / lacked insurable interest.
• Reinstatement restarts a fresh two-year contestable window on the reinstated risk.

Worked example: Applicant omits a cardiac history. She dies of a heart attack 25 months after issue. Because the policy was in force more than two years while she was alive, the insurer must pay the full death benefit — the misstatement is now uncontestable.

Suicide Clause

The suicide exclusion may not exceed 2 years from issue. If the insured dies by suicide within two years, the insurer's liability is limited to a refund of premiums paid (sometimes plus interest), not the face amount. After two years, suicide is treated like any other covered death and the full benefit is payable. Reinstatement starts a new suicide period on the reinstated coverage. Do not confuse this with incontestability — they share the two-year number but cover different events (misstatement vs. self-inflicted death).

Grace Period

West Virginia Code 33-13-7 requires a 31-day grace period for every premium after the first, regardless of payment mode:

During grace the policy stays in full force. If the insured dies during the grace period, the insurer pays the death benefit minus the one unpaid premium. The policy lapses only at the end of the 31st day if premium is still unpaid. A common distractor is "7 days" or "30 days" — the statutory floor is 31.

Other Required Provisions

Article 33-13 forces several more clauses into ordinary life contracts:

• Entire contract: the policy plus the attached application is the whole agreement; the insurer cannot incorporate outside documents or its bylaws.
• Misstatement of age or sex: the benefit is adjusted to what the premium paid would have bought at the correct age — the policy is not voided.
• Reinstatement: the owner may reinstate a lapsed policy (typically within 3 years / 5 years per contract) on proof of insurability and payment of back premium with interest.
• Loan/nonforfeiture: cash-value policies must offer cash surrender, reduced paid-up, and extended term nonforfeiture options.
• Beneficiary change: with a revocable beneficiary the owner may change the designation in writing at any time; an irrevocable beneficiary must consent. Most states make the change effective when the insurer receives it.

Creditor protection: proceeds payable to a named beneficiary are generally shielded from the insured's creditors, while proceeds payable to the estate fall into the probate estate and are exposed to estate creditors — a frequent scenario hook.

Misstatement-of-age worked example: A man understates his age by three years. The premium he paid would have purchased a $95,000 face at his true age. He dies; the insurer pays $95,000, not $100,000, and does not rescind the contract.