CHAPTER 6. CONTRACTUAL BENEFITS
IC 27-11-6
Chapter 6. Contractual Benefits
IC 27-11-6-1
Contractual benefits
Sec. 1. (a) A society may provide the following contractual
benefits in any form:
(1) Death benefits.
(2) Endowment benefits.
(3) Annuity benefits.
(4) Temporary or permanent disability benefits.
(5) Hospital, medical, or nursing benefits.
(6) Monument or tombstone benefits to the memory of deceased
members.
(7) Such other benefits as authorized for life insurers and that
are not inconsistent with this chapter.
(b) A society shall specify in its rules those persons who may be
issued or covered by the contractual benefits in subsection (a),
consistent with providing benefits to members and their dependents.
A society may provide benefits on the lives of children under the
minimum age for adult membership upon application of an adult
person.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-2
Beneficiaries of benefit contracts; funeral benefits; failure to
designate lawful beneficiary
Sec. 2. (a) The owner of a benefit contract is entitled to change
the beneficiary or beneficiaries in accordance with the laws or rules
of the society unless the owner waives this right by specifically
requesting in writing that the beneficiary designation be irrevocable.
A society may, through its laws or rules, limit the scope of
beneficiary designations and shall provide that no revocable
beneficiary shall have or obtain any vested interest in the proceeds
of any certificate until the certificate has become due and payable in
conformity with the provisions of the benefit contract.
(b) A society may make provision for the payment of funeral
benefits to the extent of such portion of any payment under a
certificate as might reasonably appear to be due to any person
equitably entitled thereto by reason of having incurred expense
occasioned by the burial of the member.
(c) If at the death of any person insured under a benefit contract
there is no lawful beneficiary to whom the proceeds shall be payable,
the amount of the benefit, except to the extent that funeral benefits
may be paid, shall be payable to the personal representative of the
deceased insured, provided that if the owner of the certificate is other
than the insured, the proceeds shall be payable to such owner.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-3
Limitation on use of benefits to pay debts or liabilities of members,
beneficiaries, or other persons
Sec. 3. No money or other benefit, charity, relief, or aid to be
paid, provided, or rendered by any society shall be liable to
attachment, garnishment, or other process or to be seized, taken,
appropriated, or applied by any legal or equitable process or
operation of law to pay any debt or liability of a member,
beneficiary, or any other person who may have a right thereunder,
either before or after payment by the society.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-4
Issuance of certificate to owner of benefit contract
Sec. 4. Every society authorized to do business in this state shall
issue to each owner of a benefit contract a certificate specifying the
amount of benefits provided. The certificate, together with any riders
or endorsements attached to the certificate, the laws of the society,
the application for membership, the application for insurance and
declaration of insurability, if any, signed by the applicant, and all
amendments to each constitutes the benefit contract as of the date of
issuance between the society and the owner, and the certificate shall
so state. A copy of the application for insurance and declaration of
insurability, if any, shall be endorsed upon or attached to the
certificate. All statements on the application shall be representations
and not warranties. Any waiver of this provision shall be void.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-5
Effect of changes, additions, or amendments to laws of society upon
owner and beneficiaries of benefit contract
Sec. 5. Any changes, additions, or amendments to the laws of the
society duly made or enacted subsequent to the issuance of the
certificate shall bind the owner and the beneficiaries and shall govern
and control the benefit contract in all respects as though the changes,
additions, or amendments had been made before and were in force at
the time of the application for insurance, except that no change,
addition, or amendment shall destroy or diminish benefits that the
society contracted to give the owner as of the date of issuance.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-6
Issuance of benefit contract upon life of a minor
Sec. 6. Any person upon whose life a benefit contract is issued
before attaining the age of majority shall be bound by the terms of
the application and certificate and by all the laws and rules of the
society to the same extent as though the age of majority had been
attained at the time of application.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-7
Payment of owner's equitable proportion of deficiency where
society's reserves are impaired
Sec. 7. A society shall provide in its laws that if its reserves as to
all or any class of certificates become impaired its board of directors
or corresponding body may require that there shall be paid by the
owner to the society the amount of the owner's equitable proportion
of such deficiency as ascertained by its board, and that, if the
payment is not made, either:
(1) it shall stand as an indebtedness against the certificate and
draw interest not to exceed the rate specified for certificate
loans under the certificates; or
(2) instead of or in combination with subdivision (1), the owner
may accept a proportionate reduction in benefits under the
certificate.
The society may specify the manner of the election and which
alternative is to be presumed if no election is made.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-8
Copies of documents as evidence of terms and conditions
Sec. 8. Copies of any of the documents mentioned in this chapter,
certified by the secretary or corresponding officer of the society,
shall be received in evidence of the terms and conditions thereof.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-9
Filing of copy of certificate with commissioner; contents of
certificate
Sec. 9. A certificate shall not be delivered or issued for delivery
in Indiana unless a copy of the form has been filed with the
commissioner in the manner provided for like policies issued by life
insurers in Indiana. Every life, accident, health, or disability
insurance certificate and every annuity certificate issued after
December 31, 1986, shall meet the standard contract provision
requirements not inconsistent with this chapter for like policies
issued by life insurers in this state, except that a society may provide
for a grace period for payment of premiums of one (1) full month in
its certificate. The certificate shall also contain a provision stating
the amount of premiums that are payable under the certificate and a
provision reciting or setting forth the substance of any sections of the
society's laws or rules in force at the time of issuance of the
certificate that, if violated, will result in the termination or reduction
of benefits payable under the certificate. If the laws of the society
provide for expulsion or suspension of a member, the certificate shall
also contain a provision that any member so expelled or suspended,
except for nonpayment of a premium or within the contestable period
for material misrepresentation in the application for membership or
insurance, shall have the privilege of maintaining the certificate in
force by continuing payment of the required premium.
As added by P.L.262-1985, SEC.1. Amended by P.L.2-1995,
SEC.110.
IC 27-11-6-10
Benefit contract issued on life of a minor; transfer of control of
ownership to the insured
Sec. 10. Benefit contracts issued on the lives of persons below the
society's minimum age for adult membership may provide for
transfer of control of ownership to the insured at an age specified in
the certificate. A society may require approval of an application for
membership in order to effect this transfer and may provide in all
other respects for the regulation, government, and control of
certificates and all rights, obligations, and liabilities incident to a
benefit contract. Ownership rights before a transfer shall be specified
in the certificate.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-11
Assignment of benefit contracts
Sec. 11. A society may specify the terms and conditions on which
benefit contracts may be assigned.
As added by P.L.262-1985, SEC.1.
IC 27-11-6-12
Cash surrender value, loans, or other options
Sec. 12. (a) For certificates issued before January 1, 1987, the
value of every paid-up nonforfeiture benefit and the amount of any
cash surrender value, loan, or other option granted shall comply with
the provisions of law applicable on December 31, 1985.
(b) For certificates issued after December 31, 1986, for which
reserves are computed on the Commissioner's 1941 Standard
Ordinary Mortality Table, the Commissioner's 1941 Standard
Industrial Table, the Commissioner's 1958 Standard Ordinary
Mortality Table, the Commissioner's 1980 Standard Mortality Table,
or any more recent table made applicable to life insurers, every
paid-up nonforfeiture benefit and the amount of any cash surrender
value, loan, or other option granted shall not be less than the
corresponding amount ascertained in accordance with the laws of
this state applicable to life insurers issuing policies containing like
benefits based upon the tables.
As added by P.L.262-1985, SEC.1.