Pennsylvania Life Study Guide

Pennsylvania tracks the NAIC model closely on the life side, which is good news for your study time: the state-law points cluster into a small number of places where Pennsylvania picked a different number from everyone else. Learn those four or five and the Pennsylvania portion of this exam largely takes care of itself. The one that carries the most weight — and that almost every summary gets wrong — is the replacement free look.

The standard provisions, and the number Pennsylvania uses twice

A Pennsylvania individual life policy is incontestable after two years in force during the insured’s lifetime, except for nonpayment of premium (40 P.S. § 510(c)). The grace period is 30 days — a full month — during which the policy stays in force, and the insurer may charge interest of up to 8% a year on the overdue premium. Reinstatement is available within three years of the date of default, with proof of insurability and payment of overdue premiums with interest, that interest capped at 8% a year.

Notice that 8% appears twice. Several states set the grace-period and reinstatement interest ceilings differently, and plenty use 6%. Pennsylvania uses one number for both.

The required nonforfeiture options are the classic three — cash surrender value, reduced paid-up insurance, extended term insurance — under Pennsylvania’s Standard Nonforfeiture Law (40 P.S. § 510.1).

The free look — one number for new policies, two for replacements

A new individual life policy carries a 10-day free look, and so does a new annuity contract (40 P.S. §§ 510c(a)(1), 510d(a)(1)). Straightforward.

Replacements are where Pennsylvania gets interesting. There is no single replacement free look. There are two, and the discriminator is not the product, the premium or the insured’s age — it is whose policy is being replaced:

• 45 days where the new policy replaces one issued by the same insurer or insurer group
• 20 days where it replaces one from a different insurer

The direction catches people out. You would expect an external replacement — new carrier, new underwriting, a genuinely different product — to earn the longer review window, and an internal one to need less scrutiny. Pennsylvania does the opposite and gives the same-insurer replacement more than twice as long.

Viatical settlements — a two-pronged rescission

Pennsylvania regulates viatical settlements under 40 P.S. § 626.1 et seq.; providers and brokers must be licensed. The viator may rescind within 30 days of the contract date, or at least 15 days from receipt of the proceeds. And if the insured dies during the rescission period, the contract is deemed rescinded (40 P.S. § 626.7).

Annuities — a duty, a course, and a date

Pennsylvania adopted the NAIC best-interest standard as Act 99 of 2021, effective 20 June 2022. It imposes a producer duty of care on annuity recommendations and requires a one-time 4-credit training course before you may sell one.

That training survived a change that swept away almost everything else: Act 142 of 2024 repealed Pennsylvania’s pre-licensing education requirement outright on 29 April 2025. There is now no classroom prerequisite to sit any producer exam. But eliminating pre-licensing did not eliminate product-specific training — the Act 99 annuity course still gates annuity sales, and long-term care still requires 8 hours plus 4 every cycle.