40-427. Nonforfeiture benefits and cash surrender values in life policies issued prior to the operative date of 40-428.
40-427
40-427. Nonforfeiture benefits and cash surrender values in lifepolicies issued prior to the operative date of 40-428.(a) This subsection shall apply only to policies of life insurance(other than industrial life insurance) issued prior to the operativedate of K.S.A. 40-428 (the standard nonforfeiture law).
The nonforfeiture benefits referred to in subsection (6) of K.S.A.40-420, shall beavailable to the insured in event of default in premium payments, afterpremiums shall have been paid for three years, and shall be a stipulatedform of insurance, effective from the due date of the defaulted premium,the net value of which shall be at least equal to the reserve at thedate of default on the policy and on dividend additions thereto, if any,exclusive of the reserve on account of return premium insurance and ontotal and permanent disability and additional accidental death benefits(the policy to specify the mortality table and rate of interest adoptedfor computing such reserves), less a percentage (not more than two andone-half) of the amount insured by the policy and of existing dividendadditions thereto, if any, and less any existing indebtedness to thecompany on or secured by the policy: Provided, That the policy maybe surrendered to the company at its home office within one month of thedue date of defaulted premium for a specific cash value at least equalto the sum which would otherwise be available for the purchase ofinsurance as aforesaid: Provided further, That the company maydefer payment for not more than six months after the applicationtherefor is made. This subsection shall not apply to term insurance oftwenty years or less. The policy may also specify that in event ofdefault in a premium payment before the options become available thereserve on any dividend additions then in force may at the option of thecompany be paid in cash or applied as a net premium to the purchase ofpaid-up term insurance for any amount not in excess of the face of theoriginal policy.
(b) This subsection shall apply only to policies of industrial lifeinsurance issued prior to the operative date of K.S.A. 40-428 (thestandard nonforfeiture law).
The nonforfeiture benefits referred to in section (7) of K.S.A.40-423, shall beavailable in event of default in premium payments after premiums shallhave been paid for five full years and shall be a stipulated form ofinsurance effective from the due date of the defaulted premium, the netvalue of which shall not be less than the reserve on the policy at theend of the last completed quarter of the policy year for which premiumshave been paid, and all dividend additions thereto, if any, exclusive ofany reserve on total and permanent disability and additional accidentaldeath benefits (the policy to specify the mortality table, rate ofinterest, and method of valuation adopted for computing such reserve),less a maximum percentage (not more than two and one-half percentum) ofthe amount insured by the policy and of existing dividend additionsthereto, if any, and less any existing indebtedness to the company on orsecured by the policy. The policy shall also specify said percentage, orother rule of calculation so as to permit determination of the values,to be specified for each year for which required values are not includedin the policy. The cash surrender value referred to in subsection (9) ofK.S.A. 40-423,shall be available upon surrender of the policy to the company at itshome office within the period of grace after the due date of thedefaulted premium and shall be equal to the net value of the stipulatedform of insurance otherwise available: Provided, That the companymay defer payment for not more than six months after the applicationtherefor is made. After premiums have been paid for five full years thecash surrender value at any time of any stipulated form of insuranceshall be the full reserve at the date of surrender.
History: L. 1947, ch. 277, § 3; July 1.