Wyoming Life Study Guide

Wyoming enacts each required life policy provision as its own statute section rather than as a lettered item inside one list, which makes the citations easy and the substance easy to skim past. Do not skim. Three of Wyoming’s answers are the opposite of what national material teaches — the free look, the suicide clause’s location, and what the insurer owes when an exclusion applies.

The free look mostly does not exist

Start here, because the instinct to answer “ten days” will cost you a mark. Wyoming imposes no general free-look requirement on an ordinary individual life policy — not in the insurance code and not in the Department’s rules.

What Wyoming has instead is a scatter of product-specific rights, and their instruments differ:

• Replacement — 30 days from the date of delivery, by rule: the replacing insurer must provide, in the policy or a separate written notice delivered with it, a right to “an unconditional refund of all premiums paid” (Rule §12-7(d)).
• Long-term care — 30 days from delivery, and this one is in the statute (W.S. 26-38-105(j)).
• Medicare supplement — 30 days from delivery, by rule (§35-17(a)(v)).
• Variable life — 10 days from receipt, by rule (§67-4(c)(i)(E)).

The standard provisions

Grace period — 30 days, or at the insurer’s option one month of not less than 30 days, or 4 weeks for industrial life payable more often than monthly. The insurer may charge interest not exceeding 6% for the days of grace actually used (W.S. 26-16-103). Note that 30, not the 31 that several neighbouring states use.

Incontestability — 2 years from date of issue, during the insured’s lifetime, except for nonpayment of premiums, and excluding disability-benefit and accidental-death provisions (W.S. 26-16-104).

Reinstatement — 3 years from premium default, or 2 years for industrial life, on five conditions: written application; evidence of insurability satisfactory to the insurer; payment of all premiums in arrears; payment or reinstatement of other policy indebtedness; and interest not exceeding 6% per annum compounded annually (W.S. 26-16-110(a)). It is unavailable once the policy has been surrendered for cash value, the cash value is exhausted, or the paid-up term has expired.

Policy loans become available after 3 full years’ premiums are paid. The insurer may defer a loan other than one to pay premiums for 6 months, and terminating a policy for excess indebtedness takes 30 days’ mailed notice (W.S. 26-16-108).

Suicide hides under “limitation of liability”

There is no section captioned suicide. W.S. 26-16-119 is captioned Provisions limiting liability in life insurance policies prohibited; exceptions, and it works as a prohibition with a closed list of exceptions. No Wyoming life policy may exclude liability for death occurring in a specified manner except in five circumstances: war; aviation; a specified hazardous occupation; death while resident outside the continental United States and Canada; and —

26-16-119(a)(ii)(E) — “Death within two (2) years from the date of issue of the policy as a result of suicide, while sane or insane.”

The same section also forbids limiting the time to sue to less than three years after the cause of action accrues.

Interest on delayed death proceeds — a floor, not a rate

W.S. 26-16-112(b) requires benefits to be paid within the time limits of W.S. 26-15-124 and to include interest accrued from the date of death until date of payment. But read what the rate actually is: “The interest rate shall be not less than the rate of interest payable on death proceeds left on deposit with the insurer.” It is a floor pegged to the insurer’s own deposit rate, not a fixed statutory percentage.

Two carve-outs ride with it. The requirement does not apply to variable contracts whose benefits vary with separate-account experience (26-16-112(d)). And for a private placement policy the clock runs from the later of 60 days after death or receipt of proof of death in good order.

The underlying deadline is 45 days after receipt of the proofs of loss and supporting evidence, for life, accident and health claims alike (W.S. 26-15-124(a)). Where a court finds an insurer’s refusal to pay “unreasonable or without cause,” it may award a reasonable attorney’s fee and interest at ten percent per year — that 10% is a litigation remedy, not a claim-settlement rate, and confusing the two is a classic exam trap.