Not legal advice. We paraphrased these Colorado statutes from the 2026 Colorado Revised Statutes title files published by the General Assembly's Office of Legislative Legal Services (which labels them uncertified printouts) and compared the key sections with a current text of the official code.
What is different in Colorado
Three things stand out. Colorado has its own interest schedule for death benefits, with a lower floor while the insurer is still gathering the claim and higher rates tied to the federal discount rate after that. Colorado bars an insurer from using suicide as a defense once the policy has been in force past its first year. And the statute allowing a claimant to recover two times the covered benefit for an unreasonable delay or denial, carves out life insurance issued under the life insurance article (10-3-1115(6)).
Contest period
An individual life policy delivered in Colorado must say that it is the entire contract and becomes incontestable after two years in force during the insured’s lifetime, measured from its date. The exceptions are nonpayment of premium and policy conditions on military or naval service in wartime or other prohibited risks; at the insurer’s option, disability benefits and extra accidental-death benefits may also be excepted (C.R.S. 10-7-102(1)(b)).
Suicide after the first year
If a policyholder dies by suicide after the first policy year, the insurer may not use the suicide as a defense to paying a life policy, whether the act was voluntary or involuntary and whether the policyholder was sane or insane (10-7-109). The section does not reach accident-only coverage or the parts of a life policy that insure specifically against accidental death.
Application misstatements
A policy must provide that no statement by the insured defeats the policy unless it is in a written application and a copy of that application is endorsed on or attached to the policy when issued (10-7-102(1)(c)). If the insured’s age was misstated, the benefit is adjusted to what the premium would have bought at the correct age (10-7-102(1)(d)). Once the two-year contest period has run, the incontestability provision above limits these defenses further.
Separately, Colorado defines a fraudulent insurance act as knowingly presenting a written statement with false material information, or concealing material information, with intent to defraud, whether in an application or a claim (10-1-128(1)). The same section says an allegation of fraud does not excuse an insurer from its duty to promptly investigate a claim (10-1-128(3)).
Grace period and lapse
An individual policy must give a grace period of one month, not less than 30 days, for each premium after the first year. The insurance stays in force during that month, and if the insured dies in it, the unpaid premium for the current policy year may be deducted from the settlement (10-7-102(1)(i)).
Before an individual policy lapses for nonpayment, the notice is effective only if it was mailed first class, or emailed to an owner who agreed to electronic delivery, to the owner’s last known address at least 25 days before the lapse date, with the reason for the lapse. An affidavit from the insurer’s staff is proof of the notice. The rule does not apply to policies with premiums paid monthly or more often (10-7-105.5).
Payment deadline and interest
Colorado’s interest statute, 10-7-112, covers each insurer admitted to write life insurance in the state, and it applies to individual and group life policies, among others (10-7-112(4)). Interest on the death benefit runs in tiers:
- From the date of death through 30 days after the insurer receives a complete request for payout, including due proof of death, the rate is at least what the insurer pays on proceeds left on deposit and withdrawable on demand.
- From then until the claim is settled, the annual rate is two percentage points above the federal discount rate, rounded to the nearest full percent. The statute defines that rate by reference to the Federal Reserve Bank of Kansas City.
- If the claim is denied and a judgment is entered against the insurer, interest from the date the suit was filed until payment is four points above the discount rate, except for any money the insurer deposited with the court in a court deposit action.
When rates change during a period, a weighted average by days is used (10-7-112(1)). No interest is owed under the section if the beneficiary elects in writing to take the proceeds other than as a lump sum (10-7-112(2)). The statute also says that it does not let an insurer hold back payment longer than reasonably necessary (10-7-112(3)).
Unfair claim practices
Colorado lists unfair claim settlement practices that are violations when done willfully or often enough to show a general business practice. They include misrepresenting facts or policy terms, not acknowledging claim communications or acting on them reasonably promptly, turning down claims before a reasonable investigation, sitting on a coverage decision too long after proof of loss, making no good-faith effort at a prompt settlement when liability is plain, and failing to promptly give a reasonable explanation of a denial (10-3-1104(1)(h)). The Division of Insurance enforces these standards.
Group life insurance
A group life policy delivered in Colorado must include, in substance, a 31-day grace period, a two-year contest period, and a rule that a covered person’s statement about insurability cannot be used to contest coverage after two years in force during that person’s lifetime, or unless it is in a written instrument the person signed. A copy of any statement used in a contest must have been given to the certificate owner, an assignee or the beneficiary (10-7-202(1)(a)-(c)).
The policy must also offer conversion to an individual policy, without evidence of insurability, when coverage ends because employment or class membership ends, if the application and first premium are made within 31 days. If the person dies during that conversion window before an individual policy takes effect, the amount they could have converted is payable as a claim under the group policy, whether or not they applied (10-7-202(1)(h), (j)).
Group coverage from a private employer is generally an ERISA plan too, which brings federal claim-appeal steps, time limits and remedies; see employer group life.
Fees and bad faith
Colorado’s 2008 statute lets a first-party claimant whose claim was unreasonably delayed or denied sue for reasonable attorney fees, court costs and two times the covered benefit (10-3-1116(1)). A delay or denial is unreasonable if the insurer withheld payment of a covered benefit without a reasonable basis (10-3-1115(2)).
The carve-out matters here: subsection (6) of 10-3-1115 says that section and 10-3-1116 do not apply to life insurance issued under article 7 of Title 10, the life insurance article. At the same time, 10-3-1116(3) separately says that a policy issued in Colorado must give a person claiming life, health or disability benefits, who was denied and has used up the administrative remedies, a right to de novo review in court and a jury trial.
Colorado also recognizes a common-law bad-faith claim against insurers. In Travelers Insurance Co. v. Savio, 706 P.2d 1258 (Colo. 1985), a workers’ compensation case treated as first-party coverage, the Colorado Supreme Court held that an insurer acts in bad faith in delaying or denying a valid claim when its conduct is unreasonable and it knows that, or recklessly disregards it. Reasonableness is judged objectively, by proof of industry standards. We have not read a Colorado decision applying Savio to a life insurance beneficiary.
Deadline to sue
Colorado’s general three-year period covers contract actions, except as provided in the six-year section (C.R.S. 13-80-101(1)(a)). The six-year section covers actions to recover a liquidated debt or an unliquidated, determinable amount of money due (13-80-103.5(1)(a)). Read the policy’s own legal-action clause as well.
When the beneficiary caused the death
Under Colorado’s homicide statute, a “felonious killing” means a killing for which the person is convicted of, or pleads guilty or no contest to, first- or second-degree murder or manslaughter (15-11-803(1)(b)). A felonious killing revokes any revocable gift to the killer in a governing instrument, and the instrument is read as if the killer had disclaimed it (15-11-803(3), (5)). Without a conviction, an interested person may ask a court to decide, and the court applies a preponderance of the evidence standard (15-11-803(7)(b)). That petition generally must be filed within three years after the death, with a longer window when a criminal case is pending (15-11-803(7)(c)).
A payer such as an insurer is protected if it pays the named beneficiary before it receives written notice of the claimed forfeiture, sent by registered or certified mail, return receipt requested, to its main office, or served like a summons. It is liable only for what it does two or more business days after actually receiving that notice, and it may then pay the money into the probate court (15-11-803(8)). Anyone who suspects the beneficiary caused the death should send that notice before the insurer pays.
Ex-spouses: C.R.S. 15-11-804
Colorado uses the uniform probate code’s divorce rule. Unless a governing instrument’s express terms, a court order or a contract dividing the marital estate provides otherwise, a divorce or annulment revokes any revocable disposition the insured made to the former spouse or the former spouse’s relatives in an instrument signed before the divorce (C.R.S. 15-11-804(2)).
Colorado’s version is unusually exact about insurers. A payer has no duty to ask whether the insured and the named beneficiary were still married. It is liable only for actions taken two or more business days after it actually receives a written notice that gives the decedent’s name, the claimant’s name, the nature of the benefit and a statement that the divorce occurred. The notice must go by registered or certified mail, return receipt requested, to the payer’s main office or home, or be served like a summons; other forms of notice do not create liability (15-11-804(7)). For employer plans under ERISA, see Egelhoff.
Worked example
An insured dies on March 1, 2026. The beneficiary’s complete payout request, with the certified death certificate, reaches the insurer on April 10. Interest runs from March 1 at no less than the insurer’s own rate on deposited proceeds. If the claim is still unpaid on May 10, 30 days after the complete request, the rate from that day until settlement becomes the federal discount rate plus two points. If the insurer instead denies the claim and the beneficiary sues on June 1 and wins, interest from June 1 to payment is the discount rate plus four points, less any amount the insurer had already deposited with the court.
Making a complaint
The Colorado Division of Insurance takes complaints about insurers, including life insurers: File a Complaint (Division of Insurance). Filing one leaves every deadline to sue running.
Sources
- Colorado Revised Statutes 2026, Title 10 (sections 10-1-128, 10-3-1104, 10-3-1115, 10-3-1116, 10-7-102, 10-7-105.5, 10-7-109, 10-7-112 and 10-7-202), Title 13 (13-80-101 and 13-80-103.5) and Title 15 (15-11-803), from the Office of Legislative Legal Services title downloads: leg.colorado.gov. Sections 10-1-128, 10-3-1115, 10-3-1116 and 10-7-102 were also compared with a current text of the official code (through the 2026 second regular session).
- Travelers Insurance Co. v. Savio, 706 P.2d 1258 (Colo. 1985), majority opinion read in full on CourtListener: courtlistener.com.
- Colorado Division of Insurance, File a Complaint: doi.colorado.gov.
- C.R.S. 15-11-804 (Colorado Revised Statutes 2026, Title 15, official PDF): olls.info.
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.