Oregon Life Study Guide

National material teaches the life provisions as one memorised string — thirty-day grace, two-year contest, five-year reinstatement, ten-day free look, suicide excluded by statute. Oregon breaks four of those five. Reinstatement runs three years, incontestability protects exclusions rather than defeating them, a misstated age has two remedies rather than one, and the free look every course quotes is not in an Oregon statute at all.

Reinstatement is three years — and the industrial numbers sit beside it

ORS 743.189 allows reinstatement within three years after default — not the five many candidates carry in — and two years for industrial life. It takes evidence of insurability, payment of all overdue premiums, and payment or reinstatement of any indebtedness “with interest at a rate not exceeding the maximum permitted by the policy loan provision.” Oregon fixes no separate reinstatement rate; it points at the loan provision instead. A policy surrendered and cancelled cannot be reinstated at all.

The grace period doubles the same way. ORS 743.165 requires 30 days, or at the insurer’s option one month of not less than 30 days, for every premium after the first, during which the policy continues in full force. Industrial life with premiums payable more often than monthly gets four weeks.

Incontestability precludes a contest of validity, and nothing more

ORS 743.168(1) gives two years from date of issue, and only while the policy has been in force during the insured’s lifetime. Nonpayment of premium, total-and-permanent-disability provisions and accidental-death provisions are excepted.

Subsection (2) is where the points are. Most candidates learn incontestability as “after two years the insurer can never deny.” Oregon says the opposite in terms: the clause “shall preclude only a contest of the validity of the policy” and never bars a defence resting on a provision that excludes or restricts coverage, “whether or not such restrictions or exclusions are excepted in such provision.” Four years in force plus an exclusion that plainly applies, and the exclusion still bites.

That sentence is also the only reason a suicide clause outlives the contestable period — and be precise about what Oregon has. No ORS section prescribes a suicide period. The familiar two-year exclusion, refunding premiums paid less dividends and indebtedness, reaches Oregon policies through DFR form approval (product-standards checklist 440-2456F), keyed to the ORS 743.168 contestable period. Oregon’s rules touch it only obliquely: OAR 836-080-0029(2) makes a replacing insurer credit time already elapsed under the replaced policy’s “incontestability and suicide period.”

Two remedies for a misstated age, and an election on policy loans

Most states supply one formula for a misstated age. ORS 743.180 supplies two: the benefit “shall be such as the premium would have purchased at the correct age or ages,” or “the premium may be adjusted and credit given to the insured or to the insurer,” at the insurer’s published rate at date of issue. A distractor reading “the insurer must reduce the death benefit” is only half the rule — the credit can run either way.

Policy loans run on an election as well. Under ORS 743.187(1), (3) the insurer chooses between a fixed maximum of 8% per year and an adjustable maximum — the higher of the rate used to compute the policy’s cash surrender values plus one percent, or the Moody’s Corporate Bond Yield Average — Monthly Average Corporates. An election, not a split by issue date; and since reinstatement interest is capped at whatever the loan provision permits, this one number governs both.

Group life: 31 days in both directions, and a $10,000 ceiling

ORS 743.312 gives a group policy a 31-day grace period for any premium except the first, and the death benefit continues through it — unless the policyholder gave advance written notice of discontinuance. The policyholder stays liable for pro rata premium for the days in force.

Conversion is the other 31. Under ORS 743.333 a person leaving employment or the eligible class has 31 days, without evidence of insurability, to convert into any form the insurer customarily issues except term insurance, at the customary rate for the attained age. The no-term restriction is the trap: national outlines say “any form,” and Oregon does not.

ORS 743.336 covers the whole group policy terminating, and adds two limits at once: only a person insured at least five years may convert, and the amount is capped at the smaller of the amount ceasing and $10,000.