US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 19
                           LIFE INSURANCE POLICIES
                            AND ANNUITY CONTRACTS
    41-1928.  NONFORFEITURE BENEFITS -- CERTAIN INTERIM POLICIES. (1) Each
life insurance policy issued between the effective date of this code and the
operative date of section 41-1927 (standard nonforfeiture law) shall contain:
    (a)  An automatic nonforfeiture provision, which must be either a loan, a
paid-up policy, or an extended term, to which the policyholder is entitled in
the event of default in a premium payment after three (3) full annual premiums
shall have been paid.
    (b)  Tables showing in figures the cash, paid-up and extended insurance
options available under the policy each year upon default in premium payments,
during the first twenty (20) years of the policy, or for its life if maturity
is less than twenty (20) years.
    (c)  At the insurer's option, a provision that the insurer shall have the
right to defer payment of the cash value for a period not exceeding six (6)
months.
    (2)  The value of the options referred to in subdivision (b) above, shall
be equivalents based on the reserves which shall be computed according to the
tables of mortality and rate of interest named in the policy, and according to
a basis and method of valuation acceptable under section 41-612(3) (standard
valuation law), less a specified surrender charge, not exceeding two and
one-half per cent (2 1/2%) of the amount of insurance. Provided, however, that
if the benefits under the policy are calculated according to a more modern
table than the American experience table of mortality, the value of any
extended term insurance, with accompanying pure endowment, if any, may be
calculated according to rates of mortality not exceeding one hundred thirty
per cent (130%) of the rates according to such more modern table.
    (3)  Any of the foregoing provisions or portions thereof not applicable to
single premium or term policies need not to that extent be incorporated
therein. This section shall not apply to industrial insurance, annuities, pure
endowments with or without return premium, and policies of reinsurance.