38.2-4120 - Nonforfeiture benefits, cash surrender values, certificate loans and other options.
§ 38.2-4120. Nonforfeiture benefits, cash surrender values, certificate loansand other options.
A. A society may grant paid-up nonforfeiture benefits, cash surrender values,certificate loans, and any other options its laws permit. Certificatesissued on and after June 28, 1968, must contain at least one paid-upnonforfeiture benefit, except in the case of pure endowment, annuity orreversionary annuity contracts, reducing term insurance contracts orcontracts of level term insurance for fifteen years or less expiring beforeage sixty-six.
B. For certificates, other than those for which reserves are computed on theCommissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941Standard Industrial Table or the Commissioners 1958 Standard OrdinaryMortality Table, or any more recent table made applicable to life insurancecompanies, the value of every paid-up nonforfeiture benefit and the amount ofany cash surrender value, loan or other option granted shall not be less thanany excess of (1) over (2) as follows:
(1) The reserve under the certificate determined on the basis specified inthe certificate; and
(2) The sum of any indebtedness to the society on the certificate, includinginterest due and accrued, and a surrender charge equal to 2 1/2% of the faceamount of the certificate, which, in the case of insurance on the lives ofpersons under the minimum age for adult membership, shall be the ultimateface amount of the certificate, if death benefits provided in the certificateare graded.
C. For certificates issued on a substandard basis or for certificates withreserves computed upon the American Men Ultimate Table of Mortality, the termof any extended insurance benefit granted, including any accompanying pureendowment, may be computed upon the rates of mortality not greater than 130percent of those shown by the mortality table specified in the certificatefor the computation of the reserve.
D. For certificates with reserves computed on the Commissioners 1941 StandardOrdinary Mortality Table, the Commissioners 1941 Standard Industrial Table orthe Commissioners 1958 Standard Ordinary Mortality Table, or any more recenttable made applicable to life insurance companies, every paid-upnonforfeiture benefit and the amount of any cash surrender value, loan orother option granted shall not be less than the corresponding amountascertained in accordance with the provisions of the laws of thisCommonwealth applicable to life insurers issuing policies containing likeinsurance benefits based upon such tables.
(1968, c. 654, § 38.1-638.34; 1975, c. 262; 1986, c. 562.)