Key Takeaways
- New York requires a 10-day free look period for life insurance policies (20 days for replacement policies)
- Life insurance policies must include a 2-year incontestability clause under NY Insurance Law
- New York prohibits unfair discrimination based on sex, sexual orientation, gender identity, or domestic violence victim status
- Suicide exclusion in New York is limited to 2 years from policy issue date
- NY requires specific policy readability standards (Flesch score of 45 or higher)
New York Life Insurance Policy Requirements
New York law imposes specific requirements on life insurance policies sold in the state. These requirements protect consumers and ensure policy standardization.
Free Look Period
New York provides specific free look periods:
| Policy Type | Free Look Period |
|---|---|
| Standard Life Policy | 10 days |
| Replacement Policy | 20 days |
| Senior Citizens (60+) | 10 days (60 days for LTC) |
| Annuities | 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: New York's 10-day free look for life insurance is standard, but replacement policies get 20 days. This extended period helps protect consumers making replacement decisions.
Incontestability Clause
New York 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 material misrepresentation of age
- The clause protects beneficiaries from having claims denied due to application errors
New York Specific Rules
- Incontestability period begins from the date of issue
- If policy lapses and is reinstated, a new 2-year period begins
- NY strictly enforces incontestability protections
Suicide Clause
New York 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
- Only return of premiums paid during exclusion period
Unfair Discrimination Prohibitions
New York has comprehensive anti-discrimination laws for insurance:
Protected Classes in New York Insurance
| Protected Class | Prohibition |
|---|---|
| Sex | Cannot use as sole rating factor |
| Sexual Orientation | Full protection |
| Gender Identity | Full protection |
| Marital Status | Cannot discriminate |
| Domestic Violence Victim | Cannot use as rating factor |
| Genetic Information | Cannot use in underwriting |
What IS Permitted
Insurers can consider:
- Age
- Health conditions
- Smoking status
- Occupation (with limitations)
- Lifestyle factors related to risk
New York Specific: New York specifically prohibits using domestic violence victim status as an underwriting factor. Insurers cannot deny, cancel, or charge higher rates based on this status.
Policy Readability Requirements
New York has strict readability standards:
Flesch Reading Ease Score
- Policies must have a Flesch score of 45 or higher
- Uses clear, understandable language
- Avoids excessive legal jargon
- DFS reviews policies for compliance
Format Requirements
- 10-point minimum type size
- Clear section headings
- Table of contents for longer policies
- Summary page with key information
Policy Delivery Requirements
New York requires:
- Policy delivered within reasonable time (typically 30-60 days)
- Delivery must include policy summary
- Receipt should be obtained
- Electronic delivery permitted with consent
How long is the free look period for a replacement life insurance policy in New York?
Which of the following is a prohibited basis for discrimination in New York life insurance?