Maine Life Study Guide

Learn one thing here: Maine’s free look is real, it is ten days, and it sits one hyphen outside the list the required-provisions statute incorporates. Candidates who work from that list conclude Maine mandates no free look, and answer confidently and wrongly.

The incorporation gap

24-A M.R.S. §2503 is the incorporating section: a life policy must contain “in substance all of the applicable provisions required by sections 2504 to 2515.” Open all twelve and you get the baseline — grace, entire contract, incontestability, misstatement of age, dividends, policy loans, reinstatement, payment of claims. No right to return the policy anywhere in it.

It is at §2515-A. Ten days, and the remedy matters as much as the number: on return the policy is “void as from the beginning and as if the policy had not been issued.” Rescission, not cancellation going forward. It must sit under a caption on the face page, and the owner may return the policy to the home office, a branch office, or the agent who processed the application — three destinations, and the third is the one distractors omit.

Grace, reinstatement, and two 6% ceilings

Grace at §2505 is 30 days, or one month of not less than 30 days, with 4 weeks for industrial life paid more often than monthly. The tail of the section holds the marks: the insurer “may impose an interest charge not in excess of 6% per annum for the number of days of grace elapsing before the payment of the premium.” Grace here is free of forfeiture, not free of charge.

Reinstatement at §2512 runs 3 years from premium default — 2 years for industrial life — on evidence of insurability and payment of overdue premiums with interest “not exceeding 6% per annum.” Same rate, different clock.

Incontestability — and what §2516 says it buys

§2507 makes a policy contestable “not more than 2 years after its date of issue,” with nonpayment of premium always excepted and disability and accidental-death riders exceptable at the insurer’s option. Then read §2516: incontestability precludes a contest of validity only, and never bars a defence based on a provision that excludes or restricts coverage. A claim outside the policy’s terms in year six is still refused — the insurer is not contesting the contract but applying it.

Suicide — Maine writes the clause twice

§2525(1)(B)(5) permits the familiar exclusion: suicide within 2 years of issue, “while sane or insane.” §2525(1)(B)(6) permits a second, independent 2 years running from an increase in policy face amount. Issue in 2020, increase in 2026, and the increase carries a live exclusion until 2028 — long after the original clock expired. Bank a third number from the same section: an insurer may not limit the time to sue to less than 3 years.

Policy loans — three years in, six months out

§2510 does four jobs at once. The loan right arises only after 3 full years’ premiums have been paid. The insurer may defer a loan 6 months — except a loan made to pay a premium. The policy must print a table of loan values for the first 20 years. And it may not terminate for indebtedness without 30 days’ notice to the policyholder and to any assignee.

Two notices, and one window that closes early

§2556 is Maine’s designee rule. Before an individual life policy in force one year or more may be terminated for nonpayment, notice must go to the policyholder and to any third party designated in writing, at least 21 days before grace expires. Not thirty, not ten.

§2508 handles misstatement of age without drama: the benefit is adjusted, never voided, to “such as the premium would have purchased at the correct age or ages.” The annuity counterpart at §2521 is captioned misstatement of age or sex.

On the secondary market, §6809(3) gives the viator the earlier of 30 days after the contract is executed or 15 days after the viator receives payment. The earlier — so a provider that pays quickly shortens its own window, the opposite of what most candidates guess.