Key Takeaways
- Colorado requires a 10-day free look period for life insurance policies (30 days for seniors 60+)
- Life insurance policies must include a 2-year incontestability clause under Colorado law
- Colorado prohibits unfair discrimination based on genetic information, domestic violence history, and other protected classes
- Suicide exclusion in Colorado is limited to 2 years from policy issue date
- Colorado requires plain language policy forms approved by the DOI
Colorado Life Insurance Policy Requirements
Colorado law imposes specific requirements on life insurance policies sold in the state. These requirements protect consumers and ensure policy standardization.
Free Look Period
Colorado provides free look periods that vary by age:
| Policy Type | Free Look Period |
|---|---|
| Standard Life Policy | 10 days |
| Seniors (age 60+) | 30 days |
| Annuities | 10 days (30 days for 60+) |
| Replacement Policy | 10 days |
During the free look period, the policyholder can:
- Review the policy
- Return it for a full refund of premiums paid
- No questions asked, no penalty
Exam Tip: Colorado provides an extended 30-day free look for seniors age 60 and older. This is a Colorado-specific consumer protection.
Incontestability Clause
Colorado requires a 2-year incontestability clause in all life insurance policies:
- After 2 years from issue, the insurer cannot contest the policy based on misstatements in the application
- Exceptions: Fraud, non-payment of premiums, or violation of policy conditions
- The clause protects beneficiaries from having claims denied due to application errors
Colorado Specific Rules
- Incontestability period begins from the issue date
- If policy lapses and is reinstated, a new 2-year period begins
- Does not protect against intentional fraud
Suicide Clause
Colorado limits the suicide exclusion:
- Suicide exclusion cannot exceed 2 years from policy issue
- After 2 years, death by suicide is covered
- If policy is reinstated, new 2-year period may apply
- Accidental death benefits may have different rules
Unfair Discrimination Prohibitions
Colorado has specific anti-discrimination laws for insurance:
Protected Classes in Colorado Insurance
| Protected Class | Prohibition |
|---|---|
| Genetic Information | Cannot use genetic test results for underwriting |
| Domestic Violence | Cannot discriminate against victims of domestic abuse |
| Sexual Orientation | Cannot discriminate in underwriting |
| Gender Identity | Cannot discriminate based on gender identity |
| Disability | Cannot discriminate (with limited risk-based exceptions) |
What IS Permitted
Insurers can consider:
- Age
- Health conditions (current medical history)
- Smoking status
- Occupation (with limitations)
- Lifestyle factors related to risk
- Driving record
Colorado Specific: Colorado specifically prohibits the use of genetic information in life insurance underwriting, ahead of some federal requirements.
Beneficiary Protections
Colorado has specific beneficiary protection laws:
Death Claim Requirements
Colorado requires insurers to:
- Pay death claims promptly after proof of death
- Provide interest on late payments
- Not delay claims unreasonably
- Make good-faith efforts to locate beneficiaries
Unclaimed Property
If beneficiaries cannot be found:
- Death benefits are not forfeited
- Must be reported as unclaimed property
- Escheat to the Colorado State Treasurer
- Beneficiaries can still claim from the state
Policy Delivery Requirements
Colorado requires:
- Policy delivered within 60 days of issue
- Delivery must include required disclosures
- Electronic delivery permitted with consent
- Acknowledgment of receipt required
How long is the free look period for a life insurance policy purchased by a 65-year-old in Colorado?
Which of the following CAN be used for life insurance underwriting in Colorado?