Required Policy Provisions

  1. Law
  2. Georgia Code
  3. Insurance
  4. Group Life Insurance
  5. Required Policy Provisions

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  1. No policy of group insurance shall be delivered in this state unless it contains in substance the following provisions or provisions which in the opinion of the Commissioner are more favorable to the persons insured or at least as favorable to the persons insured and more favorable to the policyholder:
    1. A provision that the policyholder is entitled to a grace period of not less than 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period;
    2. A provision that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue and that no statement made by any person insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance, with respect to which the statement was made, after the insurance has been in force prior to the contest for a period of two years during such person's lifetime nor unless it is contained in a written instrument signed by him or her;
    3. A provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued, that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties, and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to the person or to his or her beneficiary;
    4. A provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his or her coverage;
    5. A provision specifying an equitable adjustment of premiums or of benefits or of both to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used;
    6. A provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, except as otherwise provided in paragraph (11) of this subsection, subject to the provisions of the policy, in the event there is no designated beneficiary living at the death of the person insured, as to all or any part of such sum and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $500.00 to any person appearing to the insurer to be entitled equitably thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured;
    7. A provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled, the person to whom the insurance benefits are payable, and the rights and conditions set forth in paragraphs (8) through (10) of this subsection;
    8. A provision that, if the insurance or any portion of it on a person covered under the policy other than the child of an employee insured pursuant to Code Section 33-27-2 ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, the person shall be entitled to have issued to him or her by the insurer without evidence of insurability an individual policy of life insurance without disability or other supplementary benefits. Application for the individual policy shall be made and the first premium paid to the insurer within 31 days after termination of employment or of membership in the class or classes eligible for coverage under the policy. The individual policy shall at the option of the person be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for. The individual policy shall be in an amount not in excess of the amount of life insurance which ceases because of the termination, less the amount of any life insurance for which such person is or becomes eligible within 31 days after termination under the same or any other group policy, provided that any amount of insurance which shall have matured on or before the date of the termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not for the purposes of this paragraph be included in the amount which is considered to cease because of such termination. The premium on the individual policy shall be at the insurer's then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his or her age attained on the effective date of the individual policy;
    9. A provision that, if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured under the group policy at the date of such termination, other than a child of an employee insured pursuant to Code Section 33-27-2, whose insurance terminates and who has been so insured for at least five years prior to such termination date shall be entitled to have issued to him or her by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by paragraph (8) of this subsection, except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of the amount of the person's life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he or she is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination, and $2,000.00;
    10. A provision that, if a person insured under the group policy dies during the period within which he or she would have been entitled to have an individual policy issued to him or her in accordance with paragraph (8) or (9) of this subsection, before such an individual policy shall have become effective, the amount of life insurance which he or she would have been entitled to have issued to him or her under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made; and
    11. An entity or trustee of a trust having an insurable interest pursuant to subsection (d) of Code Section 33-24-3 and effectuation authority pursuant to paragraph (4) or (5) of subsection (a) of Code Section 33-24-6, providing life, health, disability, retirement, or similar benefits to employees may designate the beneficiary of a group life insurance policy, provided that the corporation or trustee of a trust uses the insurance proceeds to provide life, health, disability, retirement, or similar benefits to such employees. As used in this paragraph, the term "employees" shall include directors, officers, employees, retired employees, or the dependents of such persons. The term "employee" shall include any former employee, but only for the purpose of replacing existing life insurance that will be surrendered in exchange for new life insurance in an amount not exceeding the insurance being surrendered.
    1. The provisions of paragraphs (6), (8), (9), and (10) of subsection (a) of this Code section shall not apply to policies issued to a creditor to insure debtors or mortgagors of such creditor.
    2. The standard provisions required for individual life insurance policies shall not apply to group insurance policies.
    3. If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions which in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing in this Code section shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies.
    4. The provisions of paragraphs (6), (7), (8), (9), and (10) of subsection (a) of this Code section shall not apply to policies issued to a corporation or trustee of a trust pursuant to paragraph (9) of Code Section 33-27-1.

(Code 1933, § 56-2704, enacted by Ga. L. 1960, p. 289, § 1; Ga. L. 1982, p. 3, § 33; Ga. L. 1983, p. 3, § 24; Ga. L. 1985, p. 149, § 33; Ga. L. 1993, p. 1721, §§ 6, 7; Ga. L. 1995, p. 776, § 4; Ga. L. 2005, p. 481, § 5/HB 291; Ga. L. 2006, p. 869, § 4/HB 1484.)

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1993, in paragraph (b)(4), "Code section" was substituted for "Code Section" and "paragraph (9)" was substituted for "subsection (9)".

Law reviews.

- For article surveying developments in Georgia contracts law from mid-1980 through mid-1981, see 33 Mercer L. Rev. 67 (1981). For note, "Incontestability Clauses in Georgia Insurance Contracts," see 13 Ga. L. Rev. 850 (1979). For note on the 1995 amendment of this Code section, see 12 Ga. St. U.L. Rev. 264 (1995).

JUDICIAL DECISIONS

Incontestability clauses contained in policies do not bar insurance companies from raising the defense that an insured neither applied for nor consented in writing to the insurance contracts. Wood v. New York Life Ins. Co., 255 Ga. 300, 336 S.E.2d 806 (1985).

Cited in Trust Co. v. Guardian Life Ins. Co. of Am., 124 Ga. App. 465, 184 S.E.2d 363 (1971); Rainey v. Guardian Life Ins. Co. of Am., 168 Ga. App. 577, 309 S.E.2d 649 (1983); Republic Nat'l Life Ins. Co. v. Taylor, 752 F.2d 523 (11th Cir. 1985).

RESEARCH REFERENCES

Am. Jur. 2d.

- 44A Am. Jur. 2d, Insurance, § 1831 et seq.

C.J.S.

- 45 C.J.S., Insurance, §§ 631, 843 et seq. 46A C.J.S., Insurance, § 2122 et seq.

ALR.

- Right of second wife to take under policy designating "wife" or "widow" as beneficiary, issued during life of first wife, 20 A.L.R. 959.

Forfeiture of life or accident insurance for nonpayment of premium due to failure or neglect of one authorized by insured to pay same, 67 A.L.R. 180.

Constitutionality, construction, and application of statutes relating to contractual time limitation provisions of insurance policies, 112 A.L.R. 1288.

Right of insurer to restitution of payments made under mistake, 167 A.L.R. 470.

Group insurance: failure of employer or insurer to notify employee dropped from pay roll of necessity for and time of contribution to premium, 2 A.L.R.2d 852.

Incontestability clause as precluding insurer from defending on ground of particular clause in life policy limiting or precluding insurer's liability because of other life insurance, 22 A.L.R.2d 809.

Misrepresentation as to employer-employee relationship as within incontestability clause of group insurance, 26 A.L.R.3d 632.

Construction and effect of "visible sign of injury" and similar clauses in accident provision of insurance policy, 28 A.L.R.3d 413.

Change of beneficiary in group life insurance policy as affected by failure to comply with policy requirements as to manner of making change, 78 A.L.R.3d 466.

Group insurance: binding effects of limitations on or exclusions of coverage contained in master group policy but not in literature given individual insureds, 6 A.L.R.4th 835.


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