Delaware Life Study Guide

Forty of the ninety scored questions on Delaware’s Life exam are Delaware law — near enough half the paper, sat as its own separately scored portion. That changes how you should read this chapter. These are not garnish on top of the national material; they are the half of the exam a general study course will not have prepared you for.

The standard provisions — and the industrial carve-out

A Delaware individual life policy is incontestable after 2 years from issue, during the insured’s lifetime (§ 2908). The grace period is 30 days, and reinstatement runs 3 years from premium default on evidence of insurability and payment of overdue premiums (§§ 2906, 2913). The required nonforfeiture options are the familiar three: cash surrender value, reduced paid-up insurance, extended term insurance.

Then Delaware adds a wrinkle almost no other state’s exam bothers with. Industrial policies get different numbers: a grace period of 4 weeks rather than 30 days, and a reinstatement window of 2 years rather than 3.

Delaware also caps what the insurer may charge on the arrears at reinstatement: interest not exceeding 6% per year, compounded annually (§ 2913).

The free look is 20 days — and only on a replacement

This is where Delaware genuinely departs from what you may have memorised elsewhere. Delaware’s headline life free look is a 20-day right to return a replaced life policy or annuity, and it lives in Regulation 1204 § 7.4 — a regulation, not the Code.

Twenty is an unusual number. Most states use 10, 30, or an age-banded pair. If an answer choice offers you 10 days or 30 days for a Delaware replacement, it is offering another state’s rule.

Viatical settlements — two clocks, and the earlier wins

Delaware regulates the secondary market through the Delaware Viatical Settlements Act (§ 7501 et seq.). The rescission right is written as a race, and the exam builds fact patterns around which clock runs out first: the viator may rescind by the earlier of 60 days after the contract is executed, or 30 days after receiving the proceeds (§ 7508(a)(6)).

Annuities — best interest, and a course before the first sale

Delaware adopted the NAIC best-interest standard in Regulation 1214, effective 1 August 2021. The producer must act in the consumer’s best interest, and the practical gate is training: a one-time four-credit course, without which a new producer may not sell annuities at all.

Two details make this more than a formality. Producers who had completed a Department-approved annuity course before 1 August 2021 were given six months to take either a new four-credit course or a one-credit supplement covering sales practices, replacement and disclosure. And separately, the insurer must provide product-specific training before you recommend its particular annuity — the generic four credits do not cover the product in front of you.

Variable products are a separate line

Delaware lists variable life and annuity products as their own line of authority in § 1707(a), distinct from Life. You need the Life line plus your FINRA registration. The structure is the tested point: the insurance licence alone does not reach variable products, and the variable line does not stand on its own.