Colorado Life Study Guide

Colorado’s life provisions look conventional until you read them closely, and then three of them turn out to say something different from what national prep material teaches. The suicide clause is half the usual length. The nonforfeiture statute names fewer options than you were taught. And the free look you are certain exists mostly does not. Learn Colorado life law as a set of departures and it stays organized.

The required provisions — where Colorado runs standard

Start with what is normal, so the exceptions stand out. C.R.S. § 10-7-102 lists the provisions every Colorado life policy must contain, and most are the national pattern: incontestability after two years during the insured’s lifetime; an entire contract clause under which no statement avoids the policy unless it appears in a written application attached to it; and a misstatement of age provision that adjusts the benefit rather than voiding the policy — the amount payable is what the premium would have purchased at the correct age.

The grace period is worded oddly and worth quoting: “a grace of one month, not less than thirty days” for every premium after the first year. The insurance stays in force during it, and if the insured dies inside the grace month the unpaid premium is simply deducted from the settlement. Note that a calendar month is sometimes longer than thirty days — the statute takes whichever is greater.

One clock sits outside the policy itself: § 10-7-105.5 requires 25 days’ notice before a lapse, except on policies whose premiums are payable monthly or more often.

Suicide — the departure that costs the most marks

Nearly every state, and nearly every textbook, gives you a two-year suicide exclusion. Colorado’s is one year. C.R.S. § 10-7-109 provides that suicide “after the first policy year” is no defense against payment, “whether said suicide was voluntary or involuntary, and whether said policyholder was sane or insane.”

Three details in that sentence get tested. It is drafted as a bar on the insurer’s defense rather than as an exclusion period. It says “policyholder,” not “insured.” And its second sentence carves out accidental death policies and the accidental-death portions of a life policy, which are governed by their own terms.

Nonforfeiture — fewer options than you were taught

Ask most candidates what a life policy’s nonforfeiture options are and you get the trio: cash surrender, reduced paid-up, extended term. Read C.R.S. § 10-7-302 and the words “reduced paid-up” and “extended term” do not appear.

What Colorado’s statute actually requires is a paid-up nonforfeiture benefit — elected on notice to the company no later than sixty days after the due date, once at least one full year’s premium has been paid — and a cash surrender value, available on surrender within sixty days after default once three full years of premiums have been paid on an ordinary policy (five on an industrial one). The statute also requires an automatic default option that takes effect unless the owner elects otherwise, and a table of values for each of the first twenty years.

The form the paid-up benefit takes is set by the policy, not the statute. The only Colorado section that names extended insurance is § 10-7-107, which governs policies written before the current law’s operative date. So if a question asks what the Colorado statute requires, the trio is wrong.

Free look — the one everybody gets backwards

There is no mandatory free look on an ordinary, non-replacement Colorado life policy. Not in § 10-7-102, not in anything it incorporates, not anywhere in Part 1.

But do not over-correct into “Colorado has no free look,” because that is wrong too. Thirty days attaches to a replacement transaction under Regulation 4-1-4, with an unconditional full refund running from delivery. Thirty days also attaches to Medicare supplement (§ 10-18-107) and long-term care (§ 10-19-111). And an annuity gets fifteen days — but only conditionally, under Regulation 4-1-12, and only where the Buyer’s Guide and the disclosure document were not delivered at or before application. That last one is really a rule about the producer’s conduct: do the disclosure properly and no fifteen-day right ever arises.

Annuities and life settlements

Colorado adopted the NAIC best-interest standard by regulation effective November 1, 2022, and it comes with teeth for producers: a one-time four-credit-hour Division-approved training course before you sell your first annuity. Producers who had already completed an older approved annuity course may take a one-hour supplement instead.

On the settlements side, a viator may rescind a viatical settlement contract at the earlier of thirty calendar days after execution or fifteen calendar days after receiving the proceeds (§ 10-7-609(3)). “The earlier of” is doing real work in that sentence — the fifteen-day clock can end the right well before the thirty-day one expires.

Finally, note what Colorado does not require: reinstatement is not among the mandatory life policy provisions at all, and no statutory time limit is set. The familiar three-year reinstatement right is a product norm here, not Colorado law.