The standard life policy provisions, nonforfeiture and settlement options, dividend options and riders are explained in the national Life Policy Provisions, Options and Riders guide. This guide covers the provisions Ohio requires in life policies (R.C. 3915.05), Ohio's statutes on false answers and incontestability, creditor and divorce rules, accelerated benefits and the replacement rule. Two Ohio facts to keep straight: Ohio has no general 10-day free look for life policies, and no Ohio suicide statute.

Required provisions (R.C. 3915.05)

Prohibited terms (R.C. 3915.09): a policy can't be forfeited for an unpaid loan until at least one month after notice to the insured and any assignee, and it can't cut the time to sue to less than five years after the cause of action arises.

Ohio's false-answer and estoppel statutes

• A false answer in an application defeats recovery only if it was willfully false, fraudulent, material, actually induced the policy, and the agent or company didn't know it was false (R.C. 3911.06).
• After three annual premiums are received, the insurer can't defend on errors, omissions or misstatements in the application except for fraud, and age (R.C. 3911.07).

Beneficiaries and creditors

• Divorce: a former spouse named as beneficiary is treated as having died first, revoking the designation, unless the designation or the divorce decree says otherwise (R.C. 5815.33).
• Creditors: policies payable to a spouse, children or dependent relatives, and their proceeds, are free from the insured's creditors, except for premiums paid to defraud creditors (R.C. 3911.10).

Accelerated benefits (R.C. 3915.21 to 3915.23)

• Accelerated benefits are paid during the insured's lifetime on a qualifying event and reduce the death benefit.
• Qualifying events include conditions that drastically shorten life span, such as heart disease with a heart attack, permanent deficits from a stroke, end-stage kidney failure and AIDS.
• They are life insurance benefits, priced mainly on mortality, not morbidity.
• The insurer sends a claim form within 15 calendar days. Otherwise, written proof of eligibility is enough (O.A.C. 3901-6-06).

Buyer's guide and replacement

• Buyer's guide and policy summary are delivered before the initial premium is accepted. If the policy has an unconditional 10-day refund provision, they may come with the policy (O.A.C. 3901-6-03(E)). This 10-day refund is what Ohio uses instead of a general life free look. The agent says they're a life insurance agent and names the insurer.
• Replacement (O.A.C. 3901-6-05) includes lapsing, surrendering, converting to reduced paid-up or extended term, reducing benefits, reissuing with less cash value or a financed purchase.
  • The applicant and agent sign a statement on whether the applicant has existing coverage. If yes, the agent presents and reads the replacement notice no later than when taking the application, both sign it, and the applicant keeps it.
  • The agent leaves copies of all sales material used.
  • The replacing insurer notifies the existing insurer within 5 business days, keeps the notices indexed by agent for 5 years, and gives the new policy a 30-day unconditional free look.

Common exam traps

• No general life free look in Ohio. The 10-day refund only lets the buyer's guide be delivered with the policy, and replacements get 30 days.
• Grace period is "one month," not 31 days.
• Incontestable after no more than 2 years; Ohio also bars most application defenses after 3 annual premiums, except fraud and age.
• Loan interest: no more than 8% fixed, or an adjustable rate.
• Divorce revokes a former spouse's beneficiary designation unless the documents say otherwise.