4.4 Policy Provisions Prohibited By Law

As always, refer to the state law section for specific regulatory requirements. In most states, life insurance policies may not contain provisions that:

• Limit the time for legal action against the insurer to less than one year after the cause of action occurs. The statute of limitations for bringing legal action cannot be shorter than one year.
• Allow backdating of a policy for more than six months. If backdating is permitted, the insurer may only backdate the policy for a maximum period of six months.
• Provide for a settlement at policy maturity that is less than the insured amount, including any dividend additions, minus outstanding policy loans, loan interest, and any unpaid premiums.
• Permit forfeiture of the policy for failure to repay a loan or loan interest if the total indebtedness on the policy is less than the policy's available cash value.