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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 each policy anniversary
(2)
(3)
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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