New York Laws
Article 32 - Insurance Contracts - Life, Accident and Health, Annuities
3215 - Disability Benefits in Connection With Life Insurance and Annuities.

(1) That disability benefits be paid or allowed only in case of total
disability and defining total disability in either of the following
forms:
(A) Total disability is incapacity of the insured, resulting from
injury or disease, to engage in any occupation for remuneration or
profit. Such a policy shall be known and described as a "total
disability" policy or contract.
(B) Total disability, shall exist whenever the insured's average
monthly earned income for a period of four months next preceding has, as
a result of the insured's injury or disease, not exceeded one-fourth of
his former earned income averaged monthly for a period (next preceding
said four months) which shall be prescribed in the policy and shall be
not less than twelve months. Such a policy shall be known and described
as an "earned income disability" policy or contract.
(2) That disability benefits will be paid or allowed only in case such
total disability is also permanent as defined in either of the following
forms:
(A) If such policy is a total disability policy, as defined in
paragraph one hereof, a provision that total disability which has been
continuous for a period specified in the contract, and which shall be
not less than four months nor more than one year, shall be deemed to be
permanent only with respect to determining the commencement of
disability benefits.
(B) If such policy is an earned income disability policy, as defined
in paragraph one hereof, a provision that total disability shall be
deemed to continue as long as the insured's earned monthly income shall,
as a result of injury or disease, not exceed one-fourth of his average
monthly earned income as determined at the commencement of total
disability.
(3) That written notice of claim be given to the insurer during the
lifetime of the insured and during the period of total disability.
Failure to give such notice shall not invalidate or reduce any claim if
it shall be shown not to have been reasonably possible to give such
notice and that notice was given as soon as was reasonably possible.
(4) That there be reasonable requirements as to the time, method and
form of proof of disability and as to the continuance of disability,
including an examination of the insured by the insurer at reasonable
intervals. Failure to furnish proof of disability within the time
required shall not invalidate or reduce any claim if it was not
reasonably possible to give proof within such time, provided such proof
is furnished as soon as reasonably possible and in no event, except in
the absence of legal capacity, later than one year from the time proof
is otherwise required.
(5) That the contract of disability insurance shall be incontestable
after it shall have been in force, during the lifetime of the insured
and without the occurrence of total disability of the insured, for a
period of three years from date of issue, except for nonpayment of
premiums and except for the conditions of the contract relating to
military or naval service.
(b) Any provision in such policy or contract that total disability
resulting from any specified cause shall be excluded from coverage,
shall contain only the following exclusions:
(1) (A) a provision terminating disability coverage when the insured
becomes a member of the military, naval or air forces of any country at
war, declared or undeclared; or
(B) a provision terminating disability coverage when the insured
becomes a member of any auxiliary or civilian non-combatant unit serving
with the military, naval or air forces of any country at war, declared
or undeclared; or
(C) a provision excluding from coverage disability commencing within
five years from the date of issue of the policy as a result of an act of
war or any act incident thereto, whether such war be declared or
undeclared, provided such act takes place while the insured is outside
the geographical limits specified in the policy.
(2) A provision excluding from the coverage disability resulting from
aviation under conditions specified in the policy.
(3) A provision excluding from the coverage disability directly
resulting from injuries wilfully and intentionally self-inflicted.
(c) No policy or contract shall contain any provision set forth in
this subsection, unless it conforms substantially to the following:
(1) Any provision excluding from the coverage disability resulting
from disease or injury occurring before the date of issue of the policy
or contract, except provisions excluding from the coverage a specific
disease or injury by name or description, shall be applicable only to
such disability commencing not later than two years after date of issue.
(2) A provision for a reasonable adjustment of income disability
benefits if the aggregate monthly amount of such benefits payable to the
insured, under all contracts of insurance, exceeds a specified
percentage not to exceed one hundred percent of the average monthly
earned income of the insured as may be ascertained in any reasonable
manner.
(d) No such policy shall provide that the face amount of life
insurance shall be reduced because of any disability benefits paid,
except that such policy may provide, in lieu of income payments, an
annuity certain for a period of not more than ten years, the value of
which at its inception shall be equal to the face amount of insurance,
with the provision that upon recovery such annuity shall cease and the
insurance shall be restored at a proportionate premium for an amount
equal to the present value of the instalments not yet due.
(e) No such policy which provides income disability benefits shall
contain any provision whereby the income disability benefits shall
exceed a monthly rate equal to one percent of the face amount of the
policy, such face amount not to include any additional benefits payable
in case of accidental death and of any pure endowment benefits.
(f) No such contract which provides income disability benefits shall
contain any provision whereby monthly income disability benefits exceed
one-twelfth of the annual annuity which would ordinarily be payable
thereunder at age seventy.
(g) The provisions of this section shall not apply to any group life
insurance policies or group annuity contracts.
(h) Within the meaning of this section:
(1) "waiver of premiums" includes refund of waived premiums, if paid;
(2) "income payments" means payments made monthly or at less frequent
regular intervals in addition to waiver of premiums and to all benefits
otherwise provided by the contract;
(3) "disability benefits" means waiver of premiums, or both waiver of
premium and income payments, whichever may be specified in the contract;
(4) "income disability benefits" means income payments contingent upon
total disability of the insured.

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