North Dakota Life & Health Insurance Producer Exam — Complete Study Guide (2026)

Outline: North Dakota Laws and Regulations Pertaining to Life Insurance and Annuities, individual life insurance (part of 28 of 110 items on the Life exam). Standard provisions (N.D.C.C. 26.1-33-05): entire contract, free look (26.1-33-02.1), payment of premiums, grace period, reinstatement, incontestability, misstatement of age, statements of the insured, dividend options, loan provisions, nonforfeiture (26.1-33-18), exclusions, suicide (26.1-33-37), payment of claims and interest, assignment (26.1-33-33), prohibited provisions including backdating (26.1-33-06).

Most state law on the Life exam is the same short list, asked as numbers: how many days, how many years, which event starts the clock. North Dakota's list lives in one chapter of the Century Code, chapter 26.1-33 (Life Insurance). Section 26.1-33-05 lists thirteen provisions that every individual life policy delivered in the state must contain, and section 26.1-33-06 lists four that no policy may contain. The general concepts behind each provision are in Chapter 4; this chapter gives the North Dakota rule.

19.1 How the Statute Is Built

A life policy may not be issued or delivered in North Dakota unless its form is authorized by chapter 26.1-33 (26.1-33-03). A single-premium policy may omit provisions that only apply to periodic premiums, and a nonparticipating policy may omit the clauses about sharing surplus if it says it is nonparticipating (26.1-33-04). The required-provisions rules do not apply to annuity or industrial policies or to assessment and fraternal plans (26.1-33-08). Every policy must carry a title on its face and back that correctly describes it, and a table of the installments in which its proceeds may be paid (26.1-33-05(10), (11)).

The result is a list of fixed, quotable rules, summarized in the comparison below and then taken in turn.

In North Dakota: do not carry the model numbers over. The NAIC-style national text commonly teaches a 10-day free look and a two-year suicide period. North Dakota's return period is 20 days and its suicide clause runs one year. The 31-day grace period and two-year contestability match the usual national rule, but learn them as North Dakota statutes.

19.2 Entire Contract and Statements of the Insured

Every life policy must contain the entire contract between the parties (26.1-33-01). It must also state that all statements made by the insured, in the absence of fraud, are representations and not warranties, and that no statement avoids the policy unless it is in a written application and a copy of the application is endorsed on or attached to the policy when issued (26.1-33-05(3), (4)). The reason is fairness: the insured can see exactly what the insurer relies on, and an honest mistake in an answer does not forfeit a whole policy. Statements made orally to a producer and never written down cannot be used to avoid the policy.

19.3 Payment of Premiums and the Grace Period

Premiums are payable in advance either at the insurer's home office or to an agent of the company upon delivery of a receipt signed by one or more officers named in the policy (26.1-33-05(1)). This is why a producer should never accept a premium without giving the insurer's own receipt.

The policyowner has 31 days of grace to pay every premium after the first, during which the insurance continues in force. The grace period may carry an interest charge, and the policy may provide that an overdue premium is deducted from the proceeds if the insured dies in the period (26.1-33-05(2)). Note that the first premium has no grace period; coverage does not start until it is paid.

Variable life has its own grace rules, because the outline cites them (N.D. Admin. Code 45-04-04-03). For a scheduled-premium policy the grace period is not less than 31 days from the due date. For a flexible-premium policy the grace period begins when the policy value can no longer cover the monthly charges and must end not less than 61 days after the insurer mails the report that tells the policyholder so. Universal life must give 30 days' written notice before termination for lapse (Chapter 18).

19.4 Incontestability, Suicide, and Exclusions

Incontestability (26.1-33-05(3)). After the policy has been in force during the lifetime of the insured for two years from its date, the insurer can no longer contest it. Exceptions: nonpayment of premiums and violations relating to naval or military service in time of war; at the insurer's option, benefits for total and permanent disability and extra accidental-death benefits may also be excepted. Two phrases decide questions: "from its date" (not from delivery), and "during the lifetime of the insured" (a death inside the two years leaves the policy contestable).

Suicide (26.1-33-37 and 33-05(12)). The sanity or insanity of the insured does not matter in deciding whether a death was suicide within the terms of the policy. In any suit on a policy or certificate, it is no defense after the policy has been in force one year that the insured committed suicide, and any contrary policy provision is void. The required-provisions section sets the same period: a restriction for suicide may be effective only during the first year after issue.

Exclusions and restrictions (26.1-33-05(12)). The policy must state whether any conditions or restrictions of liability exist because of travel, occupation, change of residence, or suicide. Except for armed forces or military service in time of war, travel, occupation, and residence restrictions may be effective only during the first two years after issue. (The outline cites 26.1-33-12 for exclusions; that section is the group-conversion notice rule, covered in Chapter 20. The exclusions rule is 26.1-33-05(12).)

19.5 Misstatement of Age, Dividends, and Loans

Misstatement of age (26.1-33-05(5)). If the insured's age was understated, the amount payable is what the premium actually paid would have bought at the correct age. The adjustment is made to the benefit, not by canceling the policy.

Dividends (26.1-33-05(6)). A participating policy must provide that, beginning not later than the end of the third policy year, the insurer determines each year the divisible surplus accruing on the policy, and the owner may take the current dividend in cash. If the policy offers other options, it must say which of the four standard options applies when the owner does not elect: cash, application to premiums, paid-up additions, or accumulation at interest. A nonparticipating policy needs none of this.

Loans (26.1-33-05(7)). After the policy has been in force three years, the insurer will, on a proper assignment and on the policy's sole security, advance an amount up to the reserve at the end of the current year, less not more than 2.5 percent of the amount insured. It deducts any existing debt and any unpaid balance of the year's premium, and may collect interest in advance to the end of the policy year. The loan may be deferred up to six months after application. Failure to repay does not void the policy until total debt equals or exceeds the loan value and one month after notice is mailed to the insured and any assignee. A term policy need not contain a loan provision. The policy may not forfeit for unpaid loan interest while debt is below loan value, or without that one-month notice (26.1-33-06(1)).

By rule, a policy issued on or after January 1, 1982 must permit either a fixed maximum loan rate of not more than 8 percent a year, or an adjustable rate no higher than the greater of Moody's published monthly average two months earlier or the rate used for cash values plus one percent. An adjustable rate is set at least every 12 months and no more often than every three months, rises only when the new rate would increase it by half a percent or more, and must fall by the same measure. The insurer must tell the policyholder the initial rate when a cash loan is made (N.D. Admin. Code 45-04-03-03).

19.6 Reinstatement and Nonforfeiture

Reinstatement (26.1-33-05(8)). If, after default, the policy value has been used to buy other insurance and the original policy has not been surrendered and canceled, the policy may be reinstated within three years from the default on evidence of insurability satisfactory to the insurer and payment of back premiums with interest. Reinstatement requires insurability; a late payment inside the grace period does not.

Nonforfeiture (26.1-33-18). For policies issued after December 31, 1978, a policy must give a defaulting owner a paid-up nonforfeiture benefit if requested within 60 days of the due date of the unpaid premium; a cash surrender value on surrender within 60 days after default, but only after premiums have been paid for at least three full years (ordinary insurance); and a cash value on surrender within 30 days after a policy anniversary if the policy is paid up. If the owner makes no election within 60 days, the specified benefit takes effect automatically. The insurer may defer paying a cash surrender value for six months after demand. The policy states the mortality table and interest rate used and shows values for the first 20 years or the policy term, whichever is shorter.

19.7 Claims, Interest, and Refunds

Settlement of a death claim (26.1-33-05(9)). The policy must say that settlement will be made on receipt of due proof of death, or not later than two months after receipt of proof, and will include reasonable interest accrued from the date of death, so long as proof of death is filed within 180 days after the death. A claim filed later is still payable, but the guaranteed interest condition is lost.

Refund beyond the month of death (26.1-33-05(13)). The insurer must refund, within 30 days after notice of the insured's death, the part of the premium, fee, or other sum paid beyond the month of death. This does not apply to term life, flexible-premium life, or a policy on which the insurer has a valid defense to payment.

Right to return (26.1-33-02.1). A purchaser may return a life policy or certificate within twenty days of delivery and receive a refund of the premium. A notice saying so must be prominently printed on or attached to the first page. The clock starts at delivery to the purchaser, not at application or issue.

19.8 Provisions a Policy May Not Contain

Four things may not appear in a North Dakota life policy (26.1-33-06):

1. A forfeiture for failure to repay a loan or its interest while total debt is below the loan value, or without a stipulation of one month's notice to the insured and any assignee.
2. A clause limiting the time to bring suit to less than five years after the claim accrues.
3. A provision by which the policy purports to take effect more than six months before the application was made (backdating). Exchange, alteration, and conversion of existing policies are not prohibited.
4. A mode of settlement at maturity worth less than the amount insured on the face, plus dividend additions, less debt and any premium that may be deducted.

Policy form standards add that the text must score at least 40 on the Flesch reading ease test (or an equivalent), be printed in not less than ten-point type, give no undue prominence to any part, and carry a table of contents if it is long (26.1-33-30).

19.9 Transfer, Beneficiaries, and Creditors

A life policy may pass by transfer, will, or succession to any person, whether or not that person has an insurable interest, and the new owner may recover under the policy's terms (26.1-33-33). Notice of transfer to the insurer is unnecessary to preserve the policy unless the policy requires it (26.1-33-34); the insurer is protected for payments made before it receives notice. A beneficiary designation is not defeated by the laws on the signing and attestation of wills, and a trustee may be named beneficiary (26.1-33-41, -42). When the proceeds are payable to the insured's estate, they are not exempt from the decedent's debts (26.1-33-40). The surrender value of a policy payable to a dependent spouse, child, or relative is exempt from the insured's creditors to the extent set in 28-22-03.1 (26.1-33-36). A group policy on a newborn child may not delay coverage for a stated period unless the waiting period is prominently disclosed (26.1-33-12.1). A corporation that insures an officer may act on the policy through a written statement signed by its president and secretary (26.1-33-35).