Oregon Life Insurance Policy Requirements

Oregon law imposes specific requirements on life insurance policies sold in the state under Title 56 of the Oregon Revised Statutes (ORS), particularly Chapter 743. These requirements protect consumers and ensure policy standardization.

Regulatory Authority

The Oregon Division of Financial Regulation (DFR), part of the Department of Consumer and Business Services, regulates all insurance activities in the state:

• Headed by the Insurance Commissioner (Administrator)
• Reviews and approves policy forms
• Licenses insurance producers
• Investigates consumer complaints
• Enforces insurance laws and regulations

Free Look Period

Oregon's approach to free look periods:

Important: While Oregon does not legally mandate a free look period, most insurance companies voluntarily provide a reasonable period (typically 7-30 days) for customers to change their minds. If you cancel within this period, you are entitled to a full refund of premiums paid.

Exam Tip: Oregon does not have a legally mandated free look period, but most insurers offer one voluntarily.

Incontestability Clause (ORS 743.168)

Oregon requires a 2-year incontestability clause in all life insurance policies:

• Policy shall be incontestable after in force for 2 years from date of issue
• Applies during the lifetime of the insured
• Exception: Nonpayment of premiums

Oregon-Specific Rules

• The incontestability clause precludes only a contest of the validity of the policy
• Does NOT preclude assertion of defenses based on coverage exclusions or restrictions
• At insurer's option, disability and accidental death provisions may be excepted

Suicide Clause

Oregon 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
• Benefits limited to return of premiums if death is within exclusion period

Grace Period (ORS 743.165)

Oregon law provides a 30-day payment grace period:

This ensures that an Oregon life insurance policy cannot be canceled due to a reasonably late payment.

Beneficiary Protections

Oregon has specific beneficiary protection laws:

Unclaimed Life Insurance Benefits

Oregon requires insurers to:

• Cross-check policies against the Social Security Death Master File
• Make reasonable efforts to locate beneficiaries
• Initiate claims process when death is confirmed
• Cannot charge fees for locating beneficiaries

Unclaimed Property

If beneficiaries cannot be found:

• Death benefits are not forfeited
• Must be reported as unclaimed property to the state
• Beneficiaries can still claim from the state

Insurable Interest (ORS 743.038)

Oregon requires consent for life and health insurance:

• Consent of individual is required for life and health insurance
• Exceptions exist for certain relationships
• Insurable interest must exist at policy inception

Claims Payment (ORS 743.192)

Oregon has specific rules for payment of claims:

• Claims must be paid within reasonable time
• Interest must be paid upon failure to pay proceeds timely
• Protects beneficiaries from delayed payments

Reinstatement Rights

Oregon policyholders have reinstatement rights:

• May reinstate within 3 years of lapse
• Must provide evidence of insurability
• Must pay back premiums with interest
• New contestability period may begin

Standard Policy Provisions

Oregon requires these standard provisions in life insurance policies:

• Entire contract clause
• Misstatement of age adjustment
• Grace period (30 days)
• Incontestability clause
• Suicide exclusion (2-year maximum)
• Reinstatement provisions