Indiana Code
Chapter 12. Life Insurance Company Powers and Policy Requirements
27-1-12-5. Required Provisions of Policies Between July 1, 1935, and Transition Date or January 1, 1948

Sec. 5. (a) No policy of life insurance, other than industrial insurance, group life insurance, or reinsurance, bearing a date of issue not earlier than July 1, 1935, nor later than a transition date to be selected by the company pursuant to section 12 of this chapter, such transition date in no event to be later than January 1, 1948, shall be delivered or issued for delivery in this state or issued by a company organized under the laws of this state unless the same shall provide the following:
(1) That all premiums shall be payable in advance, either at the home office of the company, or to an agent of the company, upon delivery of a receipt signed by one (1) or more of the officers who shall be designated in the policy.
(2) For a grace of not less than thirty (30) days for the payment of every premium after the first premium, which may be subject to an interest charge, during which period the insurance shall continue in force; provided, that if the insured shall die within such period of grace the unpaid premium for the current policy year may be deducted in any settlement under the policy.
(3) That the policy, together with the application therefor, a copy of which application shall be attached to the policy and made a part thereof, shall constitute the entire contract between the parties and shall be incontestable after it shall have been in force during the lifetime of the insured for two (2) years from its date, or, at the option of the company after it shall have been in force for two (2) years from its date, except for nonpayment of premiums, and except for violation of the conditions of the policy relating to naval and military service in time of war, and at the option of the company provisions relative to benefits in the event of total and permanent disability and provisions which grant additional insurance specifically against death by accident may also be excepted.
(4) That if the age of the insured and/or the beneficiary, if that age enters into the determination of the premiums charged or benefits promised, has been misstated, the amount payable under the policy shall be such as the premium would have purchased at the correct age of the insured and/or beneficiary.
(5) That all statements made by the insured in the application shall, in the absence of fraud, be deemed representations and not warranties.
(6) That, in the case of participating policies, the policy shall participate in the surplus of the company as apportioned by the board of directors of the company, and that, beginning not later than the end of the fifth policy year, the company will determine and account for the portion of the divisible surplus so ascertained accruing on the policy, and that the owner of the policy shall have the right to have the current dividends arising from such participation paid in cash, and that at periods of not more than five (5) years, such accounting and payment at the option of the policyholder shall be had. The owner of the policy may elect to take any of the other dividend options in the policy. If the owner of the policy shall not elect any of the other dividend options provided in the policy, the apportioned dividends shall be held to the credit of the policy and be payable in cash at maturity of the policy or be withdrawable in cash at an anniversary of its date; provided, however, if the policy shall contain a provision for an apportionment of the surplus at the end of the first policy year and annually thereafter, then and in that event said policy may provide that each dividend shall be paid subject to the payment of the premium of the next ensuing year.
(7) A table showing in figures the loan values and the cash, paid-up and extended insurance options upon surrender, or available under the policy each year, upon default in premium payment during at least the first twenty (20) years of the policy, beginning at the end of the third policy year, which values shall be equal to the full reserve on the policy, except the reserve for permanent mental or physical disability, or for accidental death, and/or other supplemental benefits, less not to exceed two and one-half percent (2 1/2%) of the sum insured; following this table there shall be a clause specifying the mortality table and rate of interest adopted for computing the reserve and specifying the basis for the values and options after the period covered by the table. The provisions of this subdivision shall not apply to term policies nor to any form of paid-up insurance issued or granted in exchange for lapsed or surrendered policies.
(8) Policies issued by companies doing business in this state may provide for not more than one (1) year preliminary term insurance by incorporating therein the following clause immediately following the table of options and statement of basis therefor, as provided for in subdivision (7): "The first year's insurance under this policy is term insurance, purchased by the whole or part of the premium to be received during the first policy year and the policy shall be valued according to its terms and the laws of the state of Indiana".
(9) That after three (3) full years' premiums shall have been paid, the company, at any time while the policy is in force, will loan, on the execution of a proper assignment of the policy and on the sole security thereof, at a specified rate of interest, a sum equal to, or at the option of the insured, less than the amount stated in the table of options to be loaned at the end of the current policy year plus the value of the reserve on any dividend additions to the policy, and that the company will deduct from such loan value any existing indebtedness on or secured by the policy and any unpaid balance of the premiums for the current policy year, and may collect interest in advance on the loan to the end of the current policy year, and may further provide that such loan may be deferred for not exceeding six (6) months after the application therefor is made. It shall be further stipulated in the policy that failure to repay any such loan or pay interest thereon shall not void the policy unless such total indebtedness to the company shall equal or exceed such loan value at the time of such failure, nor until thirty (30) days after notice shall have been mailed by the company to the last known address of the insured and to the assignee, if any, if such assignee has notified the company of his address. No condition other than as provided in this subdivision shall be exacted as a prerequisite to any such loan. The provisions of this subdivision shall not be required in term policies nor shall they apply to paid-up insurance issued or granted in exchange for lapsed or surrendered policies.
(10) That in the event of default of premium payment after premiums have been paid for not less than three (3) years, the insured shall be entitled to the extended insurance shown in the table of values and options for the end of the last year for which full annual premiums shall have been paid; provided, that if there be any unpaid note given for a premium or any indebtedness to the company on account of or secured by the policy, the amount of extended insurance shall be reduced in the ratio of such indebtedness to the net value of such extended insurance, or the amount of such indebtedness shall be deducted from the net value of the extended insurance otherwise available and the balance shall be applied as a net single premium to purchase extended insurance for an amount equal either to the face of the policy or to the face of the policy less the amount of such indebtedness; and provided further, that the policy may be surrendered to the company at its home office within one (1) month from the due date of the unpaid premium for a specified cash value at least equal to the sum which would otherwise be available for the purchase of extended insurance as provided in this subdivision; and provided further, that the company may defer payment for not more than six (6) months after the application therefor is made. The provisions of this subdivision shall not be required in term insurance of twenty (20) years or less.
(11) That, should there have been default in premium payment, and the value of the policy applied to the extension of the insurance, and such insurance be in force and the original policy not surrendered to the company and cancelled, the policy may be reinstated within three (3) years from such default, upon evidence of insurability satisfactory to the company and payment of arrears of premiums with interest.
(12) That when a policy shall become a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and of the interest of the claimant and not later than two (2) months after receipt of such proof.
(13) A title on the face and on the back of the policy describing the same.
(b) Any of the provisions of subsection (a) not applicable to single premium policies shall to that extent not be incorporated therein. The provisions of subsection (a) shall not apply to policies issued on substandard, underaverage, or impaired risks. Any policy may be issued or delivered in this state which in the opinion of the department contains provisions on any one (1) or more of the several requirements of subsection (a) more favorable to the policyholder than those required in subsection (a).
Formerly: Acts 1935, c.162, s.151; Acts 1943, c.189, s.1. As amended by P.L.252-1985, SEC.60.

Structure Indiana Code

Indiana Code

Title 27. Insurance

Article 1. Department of Insurance

Chapter 12. Life Insurance Company Powers and Policy Requirements

27-1-12-0.1. Application of Certain Amendments to Chapter

27-1-12-1. Particular Rights, Privileges, and Powers

27-1-12-2. Investments; Categories, Conditions, Limitations, and Standards

27-1-12-2.1. Repealed

27-1-12-2.2. Derivative Transactions

27-1-12-2.4. Participation in Certain Investment Pools; Requirements for Pooling Agreements

27-1-12-2.5. Investments; Assets of Certain Segregated Investment Accounts; Limitations and Exceptions

27-1-12-3. Real Estate

27-1-12-3.5. Intangible Assets Attributable to Investment in Subsidiary; Exceptions

27-1-12-4. Valuation of Bonds and Securities

27-1-12-5. Required Provisions of Policies Between July 1, 1935, and Transition Date or January 1, 1948

27-1-12-6. Required Provisions of Policies After Transition Date or January 1, 1948

27-1-12-7. Required Provisions Relating to Defaulting or Surrendering Policyholder

27-1-12-8. Prohibited Provisions

27-1-12-9. Repealed

27-1-12-10. Repealed

27-1-12-10.1. Repealed

27-1-12-10.5. Rules for Minimum Standards for Establishment of Reserves

27-1-12-11. Deposit of Assets to Cover Reserve Valuation and Liabilities; Additional Deposits; Foreign Deposits; Continuation of Deposits Under Superseded Laws

27-1-12-12. Transition Period; Selection of Date; Effect

27-1-12-13. Filing Form of Policy With Department; Objections; Effect on Right to Issue

27-1-12-14. Designation of Beneficiary; Change of Beneficiary; Eligible Beneficiaries; Exemption of Policy Proceeds From Claims of Creditors

27-1-12-15. Competency of Certain Minors to Contract for Insurance and Receive Payments

27-1-12-16. Proceeds of Life Insurance; Definition; Payment to Trustees

27-1-12-17. Authority of Corporation to Insure Life of Director, Officers, Agent, or Employee; Consent to Change of Beneficiary

27-1-12-17.1. Acquisition of Insurable Interest in and Policy on Life of Employee

27-1-12-18. Contract to Extend Time for Premium Payments

27-1-12-19. Ascertainment of Indebtedness Due Upon Policy or Premium Loans; Interest

27-1-12-20. Premium Deposits; Maximum; Inclusion in Cash Surrender Value; Disposition; Withdrawal

27-1-12-21. Power to Hold Proceeds Under Trust or Other Agreement With Policyholder

27-1-12-22. Impairment of Assets or Capital; Notice of Time for Restoration; Suspension of Right to Issue New Policies

27-1-12-23. Procedure for Converting Domestic Stock Life Insurance Company Into Mutual Life Insurance Company

27-1-12-24. Offering Stock or Certificates as Inducement for Purchase of Insurance or Annuity; Revocation of Authority

27-1-12-25. Misrepresentation of Policy Terms or Benefits; Inducing Policyholder to Lapse, Forfeit, or Surrender Insurance

27-1-12-26. Fraudulent Representations; Offense

27-1-12-27. Repealed

27-1-12-28. Repealed

27-1-12-29. Group Life Insurance; Exemption of Proceeds From Legal Process

27-1-12-30. Group Life Insurance; Assignment of Incidents of Ownership

27-1-12-31. Authority to Issue Life or Endowment Insurance Upon Group Plan; Special Premium Rates; Valuation of Policies; Segregation

27-1-12-32. Financial Qualifications of Companies Issuing Certain Contracts

27-1-12-33. Variable Life Insurance Policies; Contents; Regulation

27-1-12-34. Repealed

27-1-12-34.1. Wholesale, Franchise, and Employee Term Life Insurance; Issuance or Delivery; Requirements

27-1-12-35. Life Insurance Proceeds; Payment; Time Limit; Liability for Interest

27-1-12-36. Repealed

27-1-12-37. Group Life Insurance; Eligible Policyholders; Regulations

27-1-12-38. Group Life Insurance; Requirements for Issuance of Policy to Certain Groups

27-1-12-39. Direct Response Solicitations; Notice of Payment of Compensation

27-1-12-40. Group Life Insurance; Premiums; Spouse or Dependent Child Coverage

27-1-12-41. Group Life Insurance; Required Provisions

27-1-12-42. Group Life Insurance; Conversion Rights; Notice; Time to Exercise Rights

27-1-12-43. Life Insurance Provision Allowing for Right to Return Policy

27-1-12-44. Stranger Originated Life Insurance Allegation; Lack of Insurable Interest

27-1-12-45. Execution of Post Form Does Not Affect Life Insurance; Prohibition on Consideration of Post Form in Determining Life Insurance Premiums

27-1-12-46. Policy or Certificate Designated for Purchase of Funeral Services or Merchandise; Representations by Issuer; Required Disclosures; Violations