Missouri Life Study Guide

National material teaches the required policy provisions out of a state’s insurance code and teaches the suicide clause as a two-year rule. In Missouri both habits fail. The provisions are not in Chapter 376 at all, and the suicide period is one year.

Where Missouri keeps its required provisions

Open Chapter 376 RSMo looking for grace, incontestability, reinstatement, entire contract or misstatement of age and you will not find them. They live in a regulation — 20 CSR 400-1.010 — and a candidate who reads only the statute chapter concludes, wrongly, that Missouri prescribes none of them.

The numbers themselves are worth learning in the regulation’s own words, because two of them are unusual. Grace is “a grace period of thirty-one (31) days without interest … for every premium after the first” (20 CSR 400-1.010(2)(C)). Missouri forbids it in terms, which many states do not. And if the insured dies inside the grace period the policy pays — “any premiums then due may be deducted from the proceeds.”

Incontestability is two years measured from “the earlier of the policy date or the issue date” (20 CSR 400-1.010(2)(B)), always contestable for nonpayment of premium. Note how the riders are handled: the policy is incontestable “with the exception of any accidental death, waiver of premium or total disability benefits.” That is drafted as a permission to the insurer, not a mandate — the form may leave those riders contestable. Note also what is missing: fraud is not listed as an exception here, though the accident and health provision at RSMo 376.777.1(2) does except “fraudulent misstatements.”

Suicide: one year, sane or insane, and a narrowed refund

RSMo 376.620.1 permits a policy to “exclude or restrict liability … for death as the result of suicide in the event the insured, while sane or insane, dies as a result of suicide within one year from the date of the issue.”

Three things in that sentence are testable. The period is one year, not two. The words “while sane or insane” are in the statute. And the exclusion is permissive — the insurer may exclude, and subsection 2’s refund duty is conditioned on the policy actually containing such an exclusion.

The refund is narrower than candidates expect. It is not “all premiums paid.” RSMo 376.620.2 requires the insurer to “promptly refund all premiums paid for the excluded or restricted coverage.” And where the owner later buys an increase, a fresh one-year clock attaches “only to the extent of the additional or increased death benefits.” Base coverage past its first year is unaffected.

Reinstatement — five years, and a condition precedent

20 CSR 400-1.010(2)(F) fixes the window at five years after date of default, on evidence of insurability, payment or reinstatement of any indebtedness as at default, all premiums in arrears, and interest.

Read the opening words, because they are a condition precedent: the policy may be reinstated “unless surrendered for its cash value.” Surrender extinguishes the right entirely. And the interest is not left to the form — it is capped “in an amount not to exceed the applicable policy loan interest rate(s) during the period of lapse, assessed per annum and compounded annually.”

That cap points at 20 CSR 400-1.090, which is where a caution belongs. RSMo 376.672, the section that used to carry Missouri’s policy loan rate, was repealed by 2007 S.B. 66. Anyone quoting a statutory 8% for Missouri is quoting a section that no longer exists.

The wildcard that outranks the incontestable clause

RSMo 376.580 has no time limit and no exception:

“No misrepresentation made in obtaining or securing a policy of insurance on the life or lives of any person or persons, citizens of this state, shall be deemed material, or render the policy void, unless the matter misrepresented shall have actually contributed to the contingency or event on which the policy is to become due and payable.”

So even inside the contestable period, a misrepresentation that did not contribute to the loss is not material. Note the scope is narrower than the English suggests — the protection runs to policies on the lives of “citizens of this state,” not to every policy delivered in Missouri.

Nonforfeiture: the triad is customary, not statutory

RSMo 376.670.2 requires a paid-up nonforfeiture benefit “on a plan stipulated in the policy” and a cash surrender value “in lieu of any paid-up nonforfeiture benefit.” It does not define “paid-up nonforfeiture benefit,” it never says “reduced paid-up,” and the phrase “extended term insurance” is never used as the name of an option — it appears in RSMo 376.670 only inside the proper names of the Commissioners 1958, 1961 Industrial and 1980 Extended Term Insurance mortality tables.

The insurer picks the plan and specifies it in the form; on default “a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option” (RSMo 376.670.2(3)).

One closing citation trap: for annuities, RSMo 376.669 is current and RSMo 376.671 is legacy by its own words — “the provisions of this section shall not apply to any new contract entered into after July 1, 2006.”