Outline headings covered: Standard Life Insurance Provisions (Ownership, Assignment, Right to Examine/Free Look, Payment of Premiums, Grace Period, Misstatement of Age/Sex, Incontestability, Reinstatement, Entire Contract); Beneficiary Designation Options; Types of Beneficiaries; Beneficiary-Related Clauses (Common Disaster); Settlement Options; Nonforfeiture Options; Policy Loan and Withdrawal Options; Dividend Options; Disability Riders; Riders Covering Additional Insureds; Riders Affecting Death Benefit Amount; Policy Exclusions. Printed weight 15 percent, about 22 of 150 items: the largest single domain after Basics.
Most items here ask for a number or a rule (30 days, two years, three years, 60 days). Learn the Arizona rule first and the general rule second. Sources are ARS Title 20 (azleg.gov, pages dated 09/09/26) and the Administrative Code (Cornell LII mirror); confirm current text with the Arizona Department of Insurance and Financial Institutions (DIFI).
8.1 Ownership and Assignment (Outline: Ownership; Assignment)
The owner holds the contract rights: naming and changing the beneficiary, borrowing, surrendering, assigning and choosing options. The owner is often the insured but need not be; a spouse, trust or employer can own a policy on someone else.
An absolute assignment transfers all ownership rights permanently, as in a gift or sale. A collateral assignment pledges the policy as security for a debt; the assignee's rights are limited to the amount owed, and the rest goes to the beneficiary. The insurer is bound by the paperwork it has received and does not judge an assignment's validity.
In Arizona
- Assignability is by the policy's terms. A life or disability policy may be assignable or not as its terms provide. Where the beneficiary can be changed on the insured's sole request, the insured alone may assign it by pledge or transfer of title, and the insurer may deal with the assignee as owner or pledgee until it receives written notice at its home office that the assignment has ended, or a conflicting claim (ARS 20-1122).
- Group policies. An insured may assign incidents of ownership, including the conversion privilege and right to name a beneficiary (ARS 20-1277).
- Stranger-originated life insurance. Intentionally planning a policy for someone with no insurable interest, such as an investor-funded arrangement, violates ARS 20-1104. A lawful assignment, policy loan, collateral assignment, accelerated benefit or bona fide business succession arrangement is not stranger-originated (ARS 20-443.02).
8.2 Entire Contract and Statements in the Application (Outline: Entire Contract)
The entire contract clause makes the policy, plus the application if a copy is attached, the whole agreement. Nothing outside those documents (a verbal promise, a rate book) can alter it, and a change needs a written endorsement or amendment signed by a company officer.
Statements in the application are representations, not warranties. A warranty must be literally true; a representation is true to the best of the applicant's knowledge and belief, and defeats a claim only if false and material.
In Arizona
- Which policies the standard provisions reach. Arizona's required provisions apply to individual life insurance and annuities, not to reinsurance, group life, group annuities or industrial life (ARS 20-1201). A life policy (other than industrial, group or pure endowment) may not be delivered in Arizona unless it contains in substance the provisions required by ARS 20-1203 to 20-1216, which do not reach annuities or disability or accidental death provisions (ARS 20-1202). Provisions that cannot apply to single-premium or term policies are left out (ARS 20-1202(B)). Every policy needs a title on its face and back briefly describing it (ARS 20-1216).
- Entire contract. The policy must provide that the policy, or the policy and the application if a copy is endorsed upon or attached to the policy when issued, is the entire contract, and that all statements in the application are, absent fraud, representations and not warranties (ARS 20-1205(A)).
- Misrepresentations. All statements in an application or negotiations are representations. They do not prevent recovery unless fraudulent, material to acceptance of the risk or the hazard assumed, or the insurer in good faith would not have issued the policy, or one as large, or the coverage for the loss, had it known the truth (ARS 20-1109).
8.3 Right to Examine / Free Look (Outline: Right to Examine (Free Look))
A free look provision lets the owner return a new policy within a stated period after delivery for a refund, usually of all premiums paid. The right comes from the policy or a statute.
In Arizona
- Title 20, as read, sets no free look for an ordinary individual life policy. The 1,544 sections listed in the azleg.gov Title 20 table of contents on 09/09/26 include none that gives an ordinary individual life policy a right to return it for a refund. The period, if any, is the one the policy states. Do not assume a statutory 10 days.
- Where Arizona does set return rights. Annuities: 10 days, or 30 days if the owner is 65 or older on the application date (ARS 20-1233; Chapter 9). Variable life: the policy must tell the owner the policy may be returned within 10 days after receipt (ARS 20-2604(D)(1)(e)). Replacements: the replacing insurer must give notice of the right to return the policy or contract within 30 days of delivery for an unconditional full refund (ARS 20-1241.05(E)). Annuities delivered without the buyer's guide and disclosure document at or before application: at least 15 days (ARS 20-1242.02(F)).
- Link to the buyer's guide rule. An insurer may deliver the life Buyer's Guide and Policy Summary with the policy only if the policy carries an unconditional refund provision of at least 10 days or the Policy Summary contains an unconditional refund offer; otherwise they are due before the initial premium is accepted (A.A.C. R20-6-209(C)(1)). That rule governs when disclosure papers are due; it does not require every policy to have a free look.
- Individual disability policies have a separate ten-day examination rule (A.A.C. R20-6-501), covered in Chapter 10.
8.4 Payment of Premiums and Grace Period (Outline: Payment of Premiums; Grace Period)
Premium mode is the payment frequency (annual, semiannual, quarterly, monthly); paying more often costs more in total. The first premium is paid with the application or at delivery, and the policy generally starts only after payment and delivery while the insured remains in good health (Chapter 5).
A grace period keeps the policy in force for a short time after a due premium is missed. If the insured dies in the grace period, the insurer pays the death benefit less the overdue premium.
In Arizona
- Premiums after the first are payable in advance (ARS 20-1214).
- Grace period: 30 days, or one month of not less than 30 days at the insurer's option. The grace period applies to any premium after the first, and the policy continues in full force. If a claim arises during the grace period before the overdue premium is paid, the premium may be deducted from the proceeds (ARS 20-1203).
- Other contracts. Group life: 31 days (ARS 20-1259). Annuity: one month, not less than 30 days (ARS 20-1219). Variable life, scheduled premium: not less than 31 days (ARS 20-2604(D)(2)).
- Authorized deductions. In computing what is due, the insurer may deduct unpaid premiums for the current policy year and unpaid policy-loan principal and accrued interest (ARS 20-1229).
8.5 Misstatement of Age and Sex (Outline: Misstatement of Age/Sex)
If the insured's age was misstated, the policy is not voided. The benefit is adjusted to what the premium actually paid would have bought at the correct age: reduced if the age was understated (insured really older), increased if overstated. Most policies apply the same adjustment to a gender misstatement.
In Arizona
- Benefit is what the premium would have purchased. The policy must provide that, if the age of the insured or of any other person whose age is considered in setting the premium has been misstated, any amount payable is such as the premium would have purchased at the correct age or ages (ARS 20-1206). The section text speaks of age; any gender adjustment comes from the policy's own terms.
- Group life and annuities. Group life must specify an equitable adjustment of premiums or benefits and its method (ARS 20-1263). An annuity overpayment may be charged against later payments with interest at not more than six percent per annum (ARS 20-1222).
8.6 Incontestability (Outline: Incontestability)
After the contestable period ends, the insurer may no longer void the policy or deny a claim because of misrepresentation in the application, even a material one. During the period it may rescind for a material misrepresentation, usually by returning the premiums. The clause bars a contest of validity; it does not protect against:
- Nonpayment of premium. The policy lapsed; that is not a contest of validity.
- Policy exclusions. The clause bars challenges to validity, not enforcement of an exclusion written into the policy.
In Arizona
- Two years, during the insured's lifetime. The policy must be incontestable, except for nonpayment of premiums, after it has been in force during the lifetime of the insured for two years from its date of issue. The clause excludes provisions on disability benefits or additional benefits for accidental death (ARS 20-1204). The period runs only while the insured is alive: if the insured dies in year one, the insurer can contest.
- Exclusions are not waived. An incontestability clause precludes only a contest of the policy's validity. Defenses based on provisions that exclude or restrict coverage may be asserted at any time, whether or not the clause lists them as exceptions (ARS 20-1217).
- After reinstatement. A reinstated policy may be contested for fraud or misrepresentation of facts material to the reinstatement only for the same period after reinstatement and with the same conditions and exceptions the policy provides after original issue (ARS 20-1227).
- Group life. Not contestable after two years in force; an insurability statement cannot be used to contest after two years in force during that person's lifetime, nor unless in a signed written instrument (ARS 20-1260).
8.7 Reinstatement (Outline: Reinstatement)
Reinstatement restores a lapsed policy to force. The owner usually must apply, show evidence of insurability, pay back premiums with interest and repay or reinstate any policy loan. It beats a new policy because the contract and the original premium rate (based on the original issue age) continue. It may restart the contestable and suicide periods for statements in the reinstatement application.
In Arizona
- Three years from default. The policy must be reinstated at any time within three years from the date of premium default on written application, evidence of insurability satisfactory to the insurer, payment of all premiums in arrears, and payment or reinstatement of other indebtedness, all with interest at not more than six percent per annum compounded annually. The right ends if the policy was surrendered for cash value or the paid-up term insurance has expired (ARS 20-1213).
- Contest and suicide clocks. Contestability after reinstatement is limited as in 8.6 (ARS 20-1227), and a suicide exclusion may run two years from reinstatement (ARS 20-1226(B)).
- Other contracts. Annuity: within one year of default (ARS 20-1224). Variable life, scheduled premium: within two years (ARS 20-2604(D)(4)). Reinstatement of a life policy is outside the replacement article (ARS 20-1241.01(A)(11)).
8.8 Payment of Claims (Outline: Standard Provisions; Payment of Claims)
A death claim is made by filing a claim form and due proof of death, normally a certified death certificate. The insurer may investigate. Proceeds are paid to the beneficiary named in the policy; if none can be found, to the estate or as the policy provides.
In Arizona
- Settlement on due proof. The policy must say that on a death claim, settlement is made on receipt of due proof of death and, at the insurer's option, surrender of the policy, proof of the claimant's interest, or both. A stated settlement period may not exceed two months from receipt of the proofs (ARS 20-1215).
- Interest on late first-party claims. A first-party claim not paid within 30 days after receipt of an acceptable proof of loss with all information needed for adjudication carries interest at the legal rate from the date received. The section does not apply while the insurer cannot determine who is entitled or no recipient can give a valid release (if the insurer promptly told the claimant and offered to pay on determination), or to claims denied in good faith within 30 days (ARS 20-462). It reaches payments to a named beneficiary. How this fits with the policy's own two-month period is not settled by the text read: confirm with the Department, and see Chapter 2.
- Proof-of-loss forms. On written request the insurer must furnish forms but need not complete them (ARS 20-1129).
- Payment discharges the insurer. An insurer that pays the person entitled under the policy or a written assignment is fully discharged unless it first received written notice at its home office of another's claim (ARS 20-1124).