State RegulationsNY specificDifficulty 3/5
An applicant seeks life insurance on a child who is under fourteen years and six months of age, and the applied-for amount exceeds the applicable statutory limit. Under N.Y. Ins. Law §3207, which of the following correctly states the consequence?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under N.Y. Ins. Law §3207, life insurance on a minor under fourteen years and six months of age is limited to the greatest of $50,000, 50% of the applicant's existing life insurance, or 25% in the case of a minor under four years and six months; coverage beyond the limit is void, but the defect is cured when the minor reaches fourteen years and six months. An exception exists where the applicant is a person with an insurable interest on whom the minor is not dependent.
Why the other options are wrong
- A) Only the EXCESS is void, not the whole policy; the policy stands for the permissible amount under §3207.
- C) No DFS rider filing cures an over-limit policy on a minor; the statute's own cure is the minor reaching fourteen years and six months.
- D) Guardianship of the minor does not authorize exceeding the limits; the statutory exception turns on the applicant being a person with an insurable interest on whom the minor is not dependent.
Memory hook
Over the kid-limit? Excess void until 14½ cures it — §3207.