304.15-310 Nonforfeiture provisions.
(1)
No policy of life insurance, except as stated in KRS 304.15-360 shall be delivered
or issued for delivery in this state unless it shall contain, in substance the following
provisions, or corresponding provisions which in the opinion of the commissioner
are at least as favorable to the defaulting or surrendering policyholder as are the
minimum requirements hereinafter specified and are essentially in compliance with
KRS 304.15-352:
(a) Paid-up nonforfeiture benefit. That, in the event of default in any premium
payment, the insurer will grant, upon proper request not later than sixty (60)
days after the due date of the premium in default, a paid-up nonforfeiture
benefit on a plan stipulated in the policy, effective as of such due date, of such
amount as may be hereinafter specified. In lieu of such stipulated paid-up
nonforfeiture benefit, the insurer may substitute, upon proper request not later
than sixty (60) days after the due date of the premium in default, an actuarially
equivalent alternative paid-up nonforfeiture benefit which provides a greater
amount or longer period of death benefits or, if applicable, a greater amount or
earlier payment of endowment benefits;
(b) Cash surrender value. That, upon surrender of the policy within sixty (60)
days after the due date of any premium payment in default after premiums
have been paid for at least three (3) full years in the case of ordinary insurance
or five (5) full years in the case of industrial insurance, the insurer will pay, in
lieu of any paid-up nonforfeiture benefit, a cash surrender value of such
amount as may be hereinafter specified;
(c) Effective date of benefit. That a specified paid-up nonforfeiture benefit shall
become effective as specified in the policy unless the person entitled to make
such election elects another available option not later than sixty (60) days after
the due date of the premium in default;
(d) Cash surrender value if policy paid up. That, if the policy shall have become
paid up by completion of all premium payments or if it is continued under any
paid-up nonforfeiture benefit which became effective on or after the third
policy anniversary in the case of ordinary insurance or the fifth policy
anniversary in the case of industrial insurance, the insurer will pay, upon
surrender of the policy within thirty (30) days after any policy anniversary, a
cash surrender value of such amount as may be hereinafter specified;
(e) Mortality table and interest rate used. In the case of policies which cause, on a
basis guaranteed in the policy, unscheduled changes in benefits or premiums,
or which provide an option for changes in benefits or premiums other than a
change to a new policy, a statement of the mortality table, interest rate, and
method used in calculating cash surrender values and the paid-up
nonforfeiture benefits available under the policy. In the case of all other
policies, statement of the mortality table and interest rate used in calculating
the cash surrender values and the paid-up nonforfeiture benefits available
under the policy, together with a table showing the cash surrender value, if
any, and paid-up nonforfeiture benefits, if any, available under the policy on
(2)
(3)
each policy anniversary either during the first twenty (20) policy years or
during the term of the policy, whichever is shorter, such values and benefits to
be calculated upon the assumption that there are no dividends or paid-up
additions credited to the policy and that there is no indebtedness to the insurer
on the policy; and
(f) Method used in computing value and benefit. A statement that the cash
surrender values and the paid-up nonforfeiture benefits available under the
policy are not less than the minimum values and benefits required by or
pursuant to the insurance law of the state in which the policy is delivered; an
explanation of the manner in which the cash surrender values and the paid-up
nonforfeiture benefits are altered by the existence of any paid-up additions
credited to the policy or any indebtedness to the insurer on the policy; if a
detailed statement of the method of computation of the values and benefits
shown in the policy is not stated therein, a statement that such method of
computation has been filed with the insurance supervisory official of the state
in which the policy is delivered; and a statement of the method to be used in
calculating the cash surrender value and paid-up nonforfeiture benefit
available under the policy on any policy anniversary beyond the last
anniversary for which such values and benefits are consecutively shown in the
policy.
Any of the foregoing provisions or portions thereof not applicable by reason of the
plan of insurance may, to the extent inapplicable, be omitted from the policy.
The insurer shall reserve the right to defer the payment of any cash surrender value
for a period of six (6) months after demand therefor with surrender of the policy.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1182, effective July 15, 2010. -Amended 1982 Ky. Acts ch. 263, sec. 1, effective July 15, 1982. -- Created 1970 Ky.
Acts ch. 301, subtit. 15, sec. 31, effective June 18, 1970.
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