The national Life Policy Provisions guide covers the standard provisions, nonforfeiture and dividend options, settlement options and riders. This guide covers the Wisconsin rules:

• the provisions in Wis. Stat. 632.43 to 632.48
• policy loans
• beneficiary changes, including Wisconsin's divorce rule
• buyer's guides and illustrations
• replacement
• insurable interest and life settlements

Wisconsin has no general free look for individual life policies. A replacement gets a 30-day right to return.

Required provisions

Other policy rules

• Dividends: fraternal and mutual life insurers may issue only participating policies, with narrow exceptions. Stock insurers may issue both kinds. Dividends can't be deferred more than one year (632.62).
• Assessable life policies, where policyholders can be called on for more money, are prohibited (632.41(1)).
• A burial contract can't be payable to a funeral director, except as allowed under 632.415 (632.41(2)).
• A policy can't be backdated more than 6 months before the application to get a lower age rate (Ins 2.03(1)).

Beneficiaries and assignments

• The owner may change a beneficiary who isn't explicitly irrevocable without that beneficiary's consent (632.48(1)(b)).
• A change request on the insurer's form, delivered to an intermediary representing the insurer, is actual notice to the insurer (632.48(2)).
• An assignee's rights come ahead of a beneficiary's, unless the beneficiary was made irrevocable before the assignment (632.47(2)).
• Divorce automatically revokes a revocable beneficiary designation of a former spouse. Insurance and annuity policies count as governing instruments (Wis. Stat. 854.15).

Buyer's guide, policy summary and illustrations

• Buyer's guide (Ins 2.14): the current buyer's guide is given when the application is taken. A direct-response insurer may send it with the policy only if the policy has a 30-day right to return.
• The policy summary is titled "Statement of Policy Cost and Benefit Information." Only the surrender cost index and net payment cost index may be illustrated.
• Sales disclosure (Ins 2.14(5)):
  • The intermediary discloses that they are acting as a life insurance intermediary and names the insurer.
  • Any mention of dividends says they aren't guaranteed.
• Illustrations (Ins 2.17):
  • Guaranteed elements are shown before non-guaranteed ones.
  • If the policy is issued differently, a revised illustration is signed by the owner and agent by delivery.
  • Insurers send an annual report on illustrated policies.

Replacement (Ins 2.07)

• The applicant and producer sign a statement about existing coverage.
• If replacement is involved, the producer reads the replacement notice aloud, unless the applicant declines, and both sign it. The producer leaves copies of all sales material.
• The replacing insurer notifies the existing insurer within 5 business days.
• The replacing insurer gives a 30-day right to return for a full refund.
• When the same or an affiliated insurer replaces, it credits time already served under the old policy's incontestable and suicide periods.
• Financed purchases: loans, withdrawals or surrenders within 4 months before or 13 months after the new policy takes effect are evidence of a financed purchase.
• Exempt: nonconvertible term that expires within 5 years.
• Telling an applicant to answer the replacement questions falsely is a violation.

Insurable interest, consent and life settlements

• An insurer may not knowingly issue a policy to someone without an insurable interest (631.07(1)).
• The insured must give written consent, with exceptions such as dependents without legal capacity. A grandparent may consent for a grandchild (631.07(2), (3)).
• A policy isn't void just for lack of insurable interest or consent. A court may order the proceeds paid to someone equitably entitled (631.07(4)).
• Life settlements (632.69):
  • Providers and brokers need a license from the Commissioner.
  • The owner may rescind before the earlier of 30 days after signing or 15 days after receiving the proceeds.
  • STOLI, a policy started for a third-party investor without an insurable interest, violates 631.07.

Common exam traps

• Wisconsin has no general life free look. A replacement gets 30 days, and a direct-response buyer's guide sent with the policy also needs a 30-day return right.
• Life grace is 31 days.
• The fixed loan rate cap is 12%, not 8%.
• Divorce automatically revokes a former spouse's revocable beneficiary designation.
• The replacing insurer notifies the existing insurer within 5 business days.
• A grandparent may consent to insurance on a grandchild.
• A life settlement may be rescinded within 30 days of signing or 15 days of payment, whichever is earlier.