§ 38.2-3201. Same; for industrial life policies
A. This section shall apply only to industrial life insurance policies issued prior to the operative date stated in § 38.2-3214.
B. The nonforfeiture benefits referred to in § 38.2-3347 shall be available in the event of default in premium payments after premiums have been paid for five full years, without action on the part of the insured. The nonforfeiture benefit shall be a stipulated form of insurance, effective from the due date of the defaulted premium, the net value of which at least equals the reserve on the policy, excluding any reserves for provisions (i) relating to benefits for specific types of disability, (ii) granting additional insurance specifically against accidental death, and (iii) granting other benefits in addition to life insurance, at the end of the last completed policy year for which premiums have been paid, and on any dividend additions to the policy, less a specified maximum percentage, not more than 2 1/2 percent, of the maximum face amount insured by the policy and of any dividend additions to the policy and less any existing indebtedness to the insurer on or secured by the policy. The policy shall specify the mortality table, rate of interest and method of valuation used for computing these reserves. The policy shall also specify the percentage or other rule of calculation so as to permit determination of the values for each year for which required values are not included in the policy. Instead of allowing for the deduction from the reserve of a sum not more than 2 1/2 percent of the maximum face amount insured by the policy and of any dividend additions to the policy, the insurer may insert in the policy a provision that one-fifth of the reserve may be deducted, or may provide in the policy that a deduction may be made of 2 1/2 percent of the maximum face amount insured by the policy or one-fifth of the reserve at the insurer's option.
C. If more than one option is provided, the policy shall stipulate which of the options shall apply if the insured fails to notify the insurer of his selection of an option.
D. The cash surrender value referred to in § 38.2-3347 shall be available after premiums have been paid for ten full years upon surrender of the policy to the insurer within three months of the due date of the defaulted premium and shall be at least equal to the sum which would otherwise be available for the purchase of insurance. The insurer may defer payment for not more than three months after the application for the cash surrender value is made. This section shall not apply to term insurance policies of twenty years or less, but such term policy shall specify the mortality table, rate of interest and method of valuation adopted for computing reserves.
(Code 1950, § 38-375; 1952, c. 317, § 38.1-460; 1986, c. 562.)
Sections: Previous 38.2-3200 38.2-3201 38.2-3202 38.2-3203 38.2-3204 38.2-3205 38.2-3206 38.2-3207 38.2-3208 38.2-3209 38.2-3210 38.2-3211 38.2-3212 38.2-3213 38.2-3214 NextLast modified: April 16, 2009