2.1 Wyoming Life Insurance Policy Requirements

Where These Rules Come From

Wyoming life insurance is governed by Title 26 of the Wyoming Statutes (the Insurance Code) and the administrative rules of the Wyoming Department of Insurance (DOI), led by the Insurance Commissioner. On the licensing exam, administered by Pearson VUE, you face roughly 150 questions (135 scored plus 15 unscored pretest items) in a 2.5-hour session and must answer 70% of the questions correctly. State-law items like the ones below cluster in the Wyoming portion, so memorize the exact numbers.

Free Look Period

The free look (also called the right to examine) lets a policyowner cancel a newly delivered policy for a full premium refund, no questions asked. Wyoming and the National Association of Insurance Commissioners (NAIC) model frame the tested standard as:

The clock starts on policy delivery, not application or issue. Trap: candidates pick the issue date. On a replacement, the period stretches to give the buyer time to compare the old and new contracts.

Incontestability Clause

Wyoming requires a 2-year incontestability clause. After the policy has been in force for two years during the insured's lifetime, the insurer cannot contest it for misstatements or omissions in the application.

• The two years must run during the insured's life - a contest is still allowed if death occurs inside the window.
• Survives the clause: non-payment of premium (the contract simply lapses) and, where state law permits, material fraud.
• A reinstated policy starts a fresh contestable period as to statements in the reinstatement application.

The purpose is to protect beneficiaries from claim denials over old, immaterial application errors once the insurer has had a fair chance to investigate.

Suicide Clause

Wyoming caps the suicide exclusion at 2 years from issue. If the insured dies by suicide within two years, the insurer refunds premiums paid (it does not pay the face amount). After two years, suicide is treated as any other covered death and the full death benefit is paid. Trap: choices that say suicide is excluded forever, or that the insurer keeps the premium - it must return premium during the exclusion window.

Grace Period

Wyoming requires a grace period of 30 days, or one month of not less than 30 days at the insurer's option, for premiums after the first (W.S. 26-16-103; industrial policies payable more often than monthly get four weeks). Group life policies get 31 days under W.S. 26-17-111.

During grace the policy stays fully in force. If the insured dies in the grace period, the insurer pays the death benefit minus the unpaid premium. If the premium is never paid, the policy lapses at the end of the grace period.

Misstatement of Age or Sex

If the insured's age (or, where rated, sex) was misstated, the insurer does not void the policy. Instead it adjusts the benefit to the amount the premium actually paid would have bought at the true age. Worked example: a buyer understated her age, so she paid a premium that would have purchased $95,000 at her real age though the policy face says $100,000. At death the insurer pays $95,000, not the face amount and not zero.

Other Required Provisions

Beneficiary and Creditor Protection

A revocable beneficiary can be changed by the owner at will; an irrevocable beneficiary must consent to changes, loans, or surrender. Proceeds paid to a named beneficiary are generally protected from the insured's creditors under Wyoming exemption law; proceeds paid to the estate lose that shield and are exposed to estate creditors. Practical tip on the exam: naming a person rather than the estate preserves both creditor protection and probate avoidance.

Per Stirpes vs. Per Capita

Wyoming policies distribute among multiple beneficiaries by one of two rules:

• Per capita ("by the head") - the proceeds split equally among the surviving named beneficiaries. If one of three equal beneficiaries dies, the other two each take one-half.
• Per stirpes ("by the branch") - a deceased beneficiary's share passes down to that person's children. If a beneficiary predeceases the insured, the share flows to the beneficiary's heirs rather than the surviving co-beneficiaries.

Common Disaster and Spendthrift

The Uniform Simultaneous Death Act, followed in Wyoming, presumes the insured survived the beneficiary when both die in a common disaster and the order of death cannot be determined - so the proceeds pass under the contingent beneficiary designation or to the insured's estate rather than through the beneficiary's estate. A spendthrift clause can bar a beneficiary from assigning future installment proceeds and shield those payments from the beneficiary's creditors, a feature the exam links to settlement options paid over time.

Putting the Numbers Together

The Wyoming portion rewards rote recall of the core figures. Lock in this cheat sheet:

Missing even one of these costs easy points, and several appear in multiple state-law questions, so they are the highest-yield facts in the chapter.