§ 509.2

509.2 Provisions as part of group life policy. No policy of group life insurance shall be delivered in this state unless it contains in substance the following provisions, or provisions which in the opinion of the commissionerare more favorable to the persons insured or at least as favorable to the persons insured,and more favorable to the policyholder, provided, however, that provisions of subsections 6through 10 shall not apply to policies issued to a creditor to insure debtors of such creditor;that the standard provisions required for individual life insurance policies shall not applyto group life insurance policies; and that if the group life insurance policy is on a plan ofinsurance other than the term plan, it shall contain a nonforfeiture provision or provisionswhich in the opinion of the commissioner is or are equitable to the insured persons and tothe policyholder, but nothing herein shall be construed to require that group life insurancepolicies contain the same nonforfeiture provisions as are required for individual lifeinsurance policies: 1. A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except that

provisions as are required for individual lifeinsurance policies: 1. A provision that the policyholder is entitled to a grace period of thirty-one days for the payment of any premium due except that first, during which grace period the death benefitcoverage shall continue in force, unless the policyholder shall have given the insurer writtennotice of discontinuance in advance of the date of discontinuance and in accordance with theterms of the policy. The policy may provide that the policyholder shall be liable to the insurerfor the payment of a pro rata premium for the time the policy was in force during such graceperiod. 2. 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 nostatement made by any person insured under the policy relating to the person’s insurabilityshall be used in contesting the validity of the insurance with respect to which such statementwas made after such insurance has been in force prior to the contest for a period of two yearsduring such person’s lifetime, nor unless it is contained in a written instrument signed by theperson. 3.

was made after such insurance has been in force prior to the contest for a period of two yearsduring such person’s lifetime, nor unless it is contained in a written instrument signed by theperson. 3. 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 personsinsured shall be deemed representations and not warranties, and that no statement made byany person insured shall be used in any contest unless a copy of the instrument containingthe statement is or has been furnished to such person or to the person’s beneficiary. 4. 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 insurabilitysatisfactory to the insurer as a condition to part or all of the person’s coverage. 5. A provision specifying an equitable adjustment of premiums or benefits or of both to be made in the event the age of a person insured has been misstated, such provision to containa clear statement of the method of adjustment to be used. 6.

stment of premiums or benefits or of both to be made in the event the age of a person insured has been misstated, such provision to containa clear statement of the method of adjustment to be used. 6. A provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisionsof 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 person insured, and subject to any right reserved by the insurer inthe policy and set forth in the certificate to pay at its option a part of such sum, not exceedingfive hundred dollars, to any person appearing to the insurer to be equitably entitled theretoby reason of having incurred funeral or other expenses incident to the last illness or death ofthe person insured. 7. A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection towhich the person is entitled, to whom the insurance benefits are payable, and the rights andconditions set forth in subsections 8 through 10

setting forth a statement as to the insurance protection towhich the person is entitled, to whom the insurance benefits are payable, and the rights andconditions set forth in subsections 8 through 10 if applicable. 8. A provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classeseligible for coverage under the policy, such person shall be entitled to have issued to theperson by the insurer, without evidence of insurability, an individual policy of life insurancewithout disability or other supplementary benefits, provided application for the individual Sat Dec 23 00:41:39 2023 Iowa Code 2024, Section 509.2 (19, 0) §509.2, GROUP INSURANCE 2 policy shall be made, and the first premium paid to the insurer, within thirty-one days aftersuch termination, and provided further that, a. The individual policy shall, at the option of such person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amountapplied for; b. The individual policy shall be in an amount not in excess of the amount of life insurance which

ept term insurance, then customarily issued by the insurer at the age and for the amountapplied for; b. The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of such termination, provided that any amount of insurance whichmatures on the date of such termination, or has matured prior thereto as an endowmentpayable to the person insured, whether in one sum or in installments or in the form of anannuity, shall not, for the purposes of this provision, be included in the amount which isconsidered to cease because of such termination, and 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 suchperson then belongs, and to the person’s age attained on the effective date of the individualpolicy. 9. A provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of suchtermination whose insurance terminates and who has been so insured for at least five yearsprior to such termination date shall be entitled

persons, every person insured thereunder at the date of suchtermination whose insurance terminates and who has been so insured for at least five yearsprior to such termination date shall be entitled to have issued to the person by the insureran individual policy of life insurance, subject to the same conditions and limitations as areprovided by subsection 8 above, except that the group policy may provide that the amount ofsuch individual policy shall not exceed the smaller of the amount of the person’s life insuranceprotection ceasing because of the termination or amendment of the group policy, less theamount of any life insurance for which the person is or becomes eligible under any grouppolicy issued or reinstated by the same or another insurer within thirty-one days after suchtermination, and two thousand dollars. 10. A provision that if a person insured under the group policy dies during the period within which the person would have been entitled to have an individual policy issued tothe person in accordance with subsection 8 or 9 above and before such an individual policyshall have become effective, the amount of life insurance which the person would have beenentitled to

ssued tothe person in accordance with subsection 8 or 9 above and before such an individual policyshall have become effective, the amount of life insurance which the person would have beenentitled to have issued to the person under such individual policy shall be payable as a claimunder the group policy, whether or not application for the individual policy or the paymentof the first premium therefor has been made. [C24, 27, 31, §8677, 8678; C35, §8684-e4, -e5; C39, §8684.04, 8684.05; C46, §509.4, 509.5; C50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §509.2] 2021 Acts, ch 76, §125, 126; 2022 Acts, ch 1032, §86Referred to in §508A.5, 509.4, 509.10, 509.14 Sat Dec 23 00:41:39 2023 Iowa Code 2024, Section 509.2 (19, 0)