2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 509 - GROUP INSURANCE
509.2 - PROVISIONS AS PART OF GROUP LIFE POLICY.

        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 commissioner are 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 6 to 10, inclusive, of this
      section 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 apply to group life
      insurance policies; and 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 nonforfeiture
      provisions as are required for individual life insurance 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 benefit coverage
      shall continue in force, unless the policyholder shall have 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.
         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 no statement
      made by any person insured under the policy relating to the person's
      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 person's lifetime, nor unless it is contained in a
      written instrument signed by the person.
         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 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 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 insurability satisfactory
      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 contain a 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 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 person 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
      five hundred 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 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 to which the person
      is entitled, to whom the insurance benefits are payable, and the
      rights and conditions set forth in subsections 8 to 10, inclusive,
      following 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 classes eligible for
      coverage under the policy, such person shall be entitled to have
      issued to the person 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, 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 amount applied 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 which matures on
      the date of such termination, or has matured prior thereto as an
      endowment payable to the person insured, whether in one sum or in
      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, 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 such person then
      belongs, and to the person's age attained on the effective date of
      the individual policy.
         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 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 the person by the insurer an individual policy of life insurance,
      subject to the same conditions and limitations as are provided by
      subsection 8 above, except that the group policy may provide that the
      amount of such individual policy shall not exceed the smaller of the
      amount of the person's life insurance protection ceasing because of
      the termination or amendment of the group policy, less the amount of
      any life insurance for which the person is or becomes eligible under
      any group policy issued or reinstated by the same or another insurer
      within thirty-one days after such termination, 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 to the person in
      accordance with subsection 8 or 9 above and before such an individual
      policy shall have become effective, the amount of life insurance
      which the person would have been entitled to have issued to the
      person 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.
      

         [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]
         Referred to in § 508A.5, 509.4, 509.10, 509.14