                                 CODE OF VIRGINIA

EDUCATIONAL LOAN PROVISIONS IN LIFE INSURANCE POLICIES (§ 38.2-3113.3)

Educational loan provisions may be included as additional benefits, as part of
the policy, or as a rider or as a separate agreement, subject to the following
requirements:

1. Any and all necessary eligibility qualifications for an educational loan
shall be specified in the life insurance policy, rider or separate agreement.
The policy, rider or separate agreement shall also state clearly that the loan
will be granted provided the covered individual applying for such loan has
satisfied the stated qualifications. Loan eligibility qualifications shall not
be more restrictive than the following:
			a. The loan applicant is a covered individual under the life insurance
policy;
			b. The purpose of the loan is to provide funds for a covered individual under
the policy, rider or separate agreement, or the dependent of a covered
individual under the policy, rider or separate agreement to attend an
institution of higher education, a trade school, or a technical school. As used
in this section, an &#8220;institution of higher education&#8221; shall not be
defined more restrictively than an accredited institution of higher education
that is approved by the U.S. Department of Education. Age eligibility of the
individual for whom the educational loan will be used may be limited to an age
range no less restrictive than age 15 to age 25, subject to continued life
insurance coverage of the covered individual during this duration; and
			c. The individual for whose education the loan will be used must attend a
qualifying institution at least halftime, determined in a manner consistent with
the institution&#8217;s standards for establishing full-time and half-time
attendance, and must maintain an academic record sufficient to demonstrate
reasonable progression or advancement.

2. The amount of funds available for an educational loan shall be specified in
the policy, rider or separate agreement, and shall be further limited to an
amount not to exceed the actual cost of the school or institution during any
given year of attendance less other aid received. If the amount available for
the educational loan varies by the year of attendance in the school or
institution, this shall be so stated and a schedule of annual loan availability
by dollar amount shall be included in the policy, rider or separate agreement.

3. The terms of the loan shall be clearly stated in the policy or rider, or the
policy or rider shall refer to the availability of a separate document
specifying all loan terms upon request of any insured individual. If the terms
of the loan are included in a separate document, such document must be filed
with the Commission for review. For purposes of this section, &#8220;terms of
the loan&#8221; include, but are not limited to, (i) any and all fees, charges,
and interest rates applied to borrowed funds, including a clear statement
concerning possible fluctuation of such fees and charges depending upon the
applicant&#8217;s credit worthiness and/or depending upon any sources or indices
used to determine such fees, charges or interest rates, (ii) minimum monthly
payments, (iii) maximum amount of years for loan repayment, and (iv) policy
assignment, if applicable.

4. Any life insurance policy, rider or separate agreement providing for
educational loans shall include a prominent disclosure advising the reader of
the prudence of obtaining information about educational loans from a variety of
sources before making any decision about borrowing funds for financing higher
education.

5. No policy, rider or separate agreement providing for educational loans shall
be delivered or issued for delivery in this Commonwealth unless a copy of the
form has been filed with and approved by the Commission in accordance with
&#xA7; 38.2-316. No advertising material shall be used in the solicitation or
promotion of the educational loan feature of a life insurance policy, rider or
separate agreement until such material has been filed with and approved by the
Commission in the same manner as is required for forms pursuant to &#xA7;
38.2-316.

HISTORY: 2000, c. 173.