RS 22:935 Paid-up, extended insurance and cash value
§935. Paid-up, extended insurance and cash value
No such policy of life or endowment insurance (other than a term policy for twenty years or less and policies of industrial insurance pursuant to the provisions of R.S. 22:146) issued by any legal reserve life insurer on or after January 1, 1907, unless the company elects to take advantage of the option provided in R.S. 22:936(H), after being in force three full years shall by its terms lapse or become forfeited by the nonpayment of any premium, or any note therefor, or of any loan on such policy, or of any interest on such note or loan. The reserve on such policy computed according to the standard adopted by said insurer, together with the value of any dividend additions upon said policy after deducting any indebtedness to the company and after deducting one-fifth of the said entire reserve or the sum of two and fifty-one hundredths dollars for each one hundred dollars of the face of said policy if said sum shall be more than the said one-fifth, shall upon demand, with surrender of the policy, be applied as a surrender value as agreed upon in the policy; provided that, if no other option expressed in the policy be availed of by the owner thereof, the policy shall provide for said value to be applied to the automatic option shown in the policy which automatic option shall be one of the following, either to purchase upon the same life, at the attained age, paid-up insurance, payable at the same time, and under the same conditions, except as to the payment of premiums, as the original policy, or to continue the insurance in force at its full amount, including any outstanding dividend additions, less any outstanding indebtedness on the policy, so long as such surrender value will purchase nonparticipating temporary insurance at net single premium rates by the standard adopted by the insurer, at the age of the insured at the time of lapse or forfeiture, provided that in case of any endowment policy, if the sum applicable to the purchase of temporary insurance be more than sufficient to continue the insurance to the end of the endowment term named in the policy, the excess shall be used to purchase, in the same manner, pure endowment insurance payable at the end of the endowment term named in the policy on the conditions on which the original policy was issued; and provided further that, in calculating the net single premium for any temporary insurance, the insurer may use one hundred thirty percent of the rate of mortality adopted as a basis for reserve for the policy. This further provision shall not apply to any mortality table constructed on the basis of insurance companies experience prior to 1900. Provided, further, that any attempted waiver of the provisions of this paragraph in any application, policy or otherwise shall be void, and that any value allowed in lieu thereof shall be at least equal to the net value of temporary insurance or of the temporary and pure endowment insurance herein provided for. The term of temporary insurance herein provided for shall include the period of grace, if any.
Acts 1958, No. 125. Amended by Acts 1958, No. 91, §1, eff. Jan. 1, 1959 at 12:00 Noon; Acts 1974, No. 4, §1; Redesignated from R.S. 22:167 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.