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Louisiana Group Life Insurance Standard Policy Requirements

Louisiana group life insurance has certain statutory requirements mandated by Louisiana Revised Statute 22:942 including important provisions regarding:

Louisiana Group Life Insurance Policy

  • the contract,
  • incontestability,
  • grace period,
  • misstatement of age,
  • insurability,
  • the beneficiary,
  • new persons eligible,
  • continuation to end of premium period,
  • conversion on termination of eligibility,
  • conversion on termination of policy,
  • death pending conversion and
  • non forfeiture provision and lump sum payment.

It specifically provides in full the following:

§942.  Standard provisions for group life policies

Each policy of group life insurance as defined in R.S. 22:941 shall contain in substance the following provisions or, at the option of the insurer, provisions which in the opinion of the commissioner of insurance are not less favorable to the policyholder; however, Paragraphs (6) through (12) of this Section shall not apply to policies described in R.S. 22:941(A)(3), except that, where policies are issued pursuant to that Paragraph, the insurer shall issue to the policyholder for delivery to the person whose life is insured an individual certificate setting forth the insurance protection afforded, to whom it is payable, information  relating to notice and proof of loss, and that the standard provisions required for individual life insurance policies shall not apply to group life insurance policies:

(1)  The contract.  A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been provided to such person or to his beneficiary.

(2)  Incontestability.  A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement made by an individual insured under the policy relating to his insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of two years during such individual’s lifetime nor unless it is contained in a written instrument signed by him.

(3)  Grace period.  A provision that the policyholder is entitled to a grace period either of thirty days or one month within which the payment of any premium after the first may be made during which period of grace the death benefit coverage shall continue in force, unless the policyholder has given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy.  The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period.

(4)  Misstatement of age.  A provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used.

(5)  Insurability.  A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his coverage.

(6)  Beneficiary.  A provision that any sum becoming due by reason of the death of the individual insured shall be payable to the beneficiary designated by such individual, subject to the provisions of the policy in the event there is no designated beneficiary, as to all or any part of such sum, living at the death of the individual insured and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding two hundred and fifty dollars to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the individual insured.

(7)  Certificates.  A provision that the insurer will issue to the policyholder for delivery to the employee, or member, whose life is insured under such policy, an individual certificate setting forth a statement as to the insurance protection to which he is entitled, to whom payable, together with the provisions concerning conversion rights.

(8)  New persons eligible.  A provision that from time to time all new employees or members eligible for insurance and desiring the same shall be added to the group or class thereof originally insured.

(9)  Continuation to end of premium period.  A provision, except in the case of a policy described in R.S. 22:941(B)(4), that the termination of the employment of any employee or the membership of a member shall not terminate the insurance of such employee or member under the group policy until the expiration of such period for which the premium for such employee or member has been paid, not exceeding thirty-one days.

(10)  Conversion on termination of eligibility.  A provision that if the insurance, or any portion of it, on an individual covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such individual shall be entitled to have issued to him by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made and the first premium paid to the insurer within thirty-one days after such termination.  It is further provided that:

(a)  The individual policy shall, at the option of such individual, be on any one of the forms then customarily issued by the insurer at the age and for the amount applied for.

(b)  The individual policy shall be in an amount not in any event in excess of the amount of life insurance which ceases because of such termination nor less than one thousand dollars unless a smaller amount of coverage was provided for such individual under the group policy, provided that any amount of insurance which matures on the date of such termination or has matured prior under the group policy as an endowment payable to the individual insured, whether in one sum or installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount which is considered to cease because of such termination.

(c)  The premium on the individual policy shall be at the insurer’s then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such individual then belongs, and to his age attained on the effective date of the individual policy.

(11)  Conversion on termination of policy.  A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured individuals, every individual insured at the date of such termination whose insurance terminates and who has been so insured for at least five years prior to such termination date shall be entitled to have issued to him by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by Paragraph (10) of this Section, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of (a) the amount of the individual’s life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of life insurance for which he is or becomes eligible under any group policy issued or reinstated by the same or another insurer within thirty-one days of such termination and (b) two thousand dollars.

(12)  Death pending conversion.  A provision that if a person insured under the group policy dies during the period within which he would have been entitled to have an individual policy issued to him in accordance with Paragraphs (10) and (11) of this Section and before such an individual policy shall have become effective, the amount of life insurance which he would have been entitled to have issued to him under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made.

(13)  Nonforfeiture provision. A provision that if the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same form of nonforfeiture provisions as are required for individual life insurance policies.

(14)  Lump sum payment.  Every group life insurance policy delivered or issued for delivery in this state shall allow selection by the beneficiary of an option to receive benefits in the form of a lump sum payment.

Acts 1958, No. 125.  Amended by Acts 1966, No. 171, §1; Acts 1972, No. 161, §1; Acts 1981, No. 547, §1; Acts 2003, No. 125, §1; Redesignated from R.S. 22:176 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2011, No. 94, §1, eff. Jan. 1, 2012; Acts 2014, No. 47, §1.

NOTE:  Former R.S. 22:942 redesignated as R.S. 22:656 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.

If you are a beneficiary who believes your claim was unfairly denied or have questions about your insurance claim, call today.

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