{"data":{"id":"us-ky/krs-304.15-702","jurisdiction":"us-ky","citation":"KRS 304.15-702","heading":"Permitted questioning of life insurance applicant concerning financing","body":"of premium payments.\n(1) In addition to other questions an insurer may lawfully pose to a life insurance\napplicant, insurers may inquire in the application for insurance whether  the\nproposed owner intends to pay premiums with the assistance of financing from a\nlender that will use the policy as collateral to support the financing.\n(a) If, as described in KRS 304.15-020(17), the loan provides funds which can be\nused for a purpose other than paying for the premiums, costs, and expenses\nassociated with obtaining and maintaining the life insurance policy and loan,\nthe application shall be rejected as a violation of the prohibited practices in\nKRS 304.15-717.\n(b) If the financing does not violate KRS 304.15-717 in this manner, the insurer:\n1. May make disclosures to the applicant and the insured, either on the\napplication or an amendment to the application to be completed no later\nthan the delivery of the policy, which shall include but  not be limited to\nthe following statement or a substantially similar statement:\n\"If you have entered into a loan arrangement where the policy is used as\ncollateral, and the policy does change ownership at some point in the\nfuture in satisfaction of the loan, the following may be true:\na. A change of ownership could lead to a stranger owning an interest\nin the insured's life;\nb. A change of ownership could in the future limit your ability to\npurchase future insurance on the insured's life because there is a\nlimit to how much coverage insurers will issue on one (1) life;\nc. Should there be a change of ownership and you wish to obtain\nmore insurance coverage on the insured's life in the future, the\ninsured's higher issue age, a change in health status, or oth er\nfactors may reduce the ability to obtain coverage and may result in\nsignificantly higher premiums; and\nd. You should consult a professional advisor, since a change in\nownership in satisfaction of the loan may result in tax\nconsequences to the owner, dep ending on the structure of the\nloan.\"; and\n2. May require certifications from the applicant or the insured or both\nwhich shall include but not be limited to the following statement or a\nsubstantially similar statement:\n\"I certify that:\na. I have not entered into any agreement or arrangement providing for\nthe future sale of this life insurance policy;\nb. My loan arrangement for this policy provides funds sufficient to\npay for some or all of the premiums, costs, and expenses\nassociated with obtaining and maintaining my life insurance\npolicy, but I have not entered into any agreement by which I am to\nreceive consideration in exchange for procuring this policy; and\nc. The borrower has an insurable interest in the insured.\"","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=17248","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:57:44Z","sha256":"eeb4de1b0f0c12085505072ed309f38f176ee97095aebaaf59b1d20063fbc6ec","source_id":"us-ky","stale":false,"prev":"us-ky/krs-304.15-700","next":"us-ky/krs-304.15-705"},"notice":"GroundRules: Original legal text. Not legal advice."}