Key Takeaways
- Iowa requires detailed written notice when replacing life insurance or annuities
- Producers must provide a Replacement Notice to the applicant
- Twisting (misrepresenting to induce replacement) is a serious violation
- A new 2-year incontestability period begins with replacement
Last updated: January 2026
Iowa Replacement Rules
Replacement occurs when a new life insurance policy or annuity is purchased with the intent to terminate or reduce an existing policy.
Definition of Replacement
A replacement occurs when a new policy is purchased and:
- An existing policy is lapsed, forfeited, or surrendered
- Policy values are reduced or borrowed
- Coverage is converted or reduced
Required Disclosures
The producer must provide a Replacement Notice that includes:
| Item | Requirement |
|---|---|
| Comparison | Side-by-side of existing and new policy |
| Surrender Values | Current and projected values |
| Death Benefits | Comparison of coverage amounts |
| New Contestability | New 2-year period starts |
Prohibited Practices
Twisting
Twisting is misrepresenting an existing policy to induce replacement:
- Falsely claiming existing policy is worthless
- Misrepresenting surrender values
- Hiding surrender charges of replacement
Churning
Churning is excessive replacement of policies to generate commissions.
Test Your Knowledge
What is twisting in Iowa insurance law?
A
B
C
D
Test Your Knowledge
When a life insurance policy is replaced in Iowa, what happens to the incontestability period?
A
B
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D