                                 CODE OF VIRGINIA

SAME; FOR INDUSTRIAL LIFE POLICIES (§ 38.2-3201)

A. This section shall apply only to industrial life insurance policies issued
prior to the operative date stated in &#xA7; 38.2-3214.

B. The nonforfeiture benefits referred to in &#xA7; 38.2-3347 shall be available
in the event of default in premium payments after premiums have been paid for
five full years, without action on the part of the insured. The nonforfeiture
benefit shall be a stipulated form of insurance, effective from the due date of
the defaulted premium, the net value of which at least equals the reserve on the
policy, excluding any reserves for provisions (i) relating to benefits for
specific types of disability, (ii) granting additional insurance specifically
against accidental death, and (iii) granting other benefits in addition to life
insurance, at the end of the last completed policy year for which premiums have
been paid, and on any dividend additions to the policy, less a specified maximum
percentage, not more than 2 1/2 percent, of the maximum face amount insured by
the policy and of any dividend additions to the policy and less any existing
indebtedness to the insurer on or secured by the policy. The policy shall
specify the mortality table, rate of interest and method of valuation used for
computing these reserves. The policy shall also specify the percentage or other
rule of calculation so as to permit determination of the values for each year
for which required values are not included in the policy. Instead of allowing
for the deduction from the reserve of a sum not more than 2 1/2 percent of the
maximum face amount insured by the policy and of any dividend additions to the
policy, the insurer may insert in the policy a provision that one-fifth of the
reserve may be deducted, or may provide in the policy that a deduction may be
made of 2 1/2 percent of the maximum face amount insured by the policy or
one-fifth of the reserve at the insurer&#8217;s option.

C. If more than one option is provided, the policy shall stipulate which of the
options shall apply if the insured fails to notify the insurer of his selection
of an option.

D. The cash surrender value referred to in &#xA7; 38.2-3347 shall be available
after premiums have been paid for ten full years upon surrender of the policy to
the insurer within three months of the due date of the defaulted premium and
shall be at least equal to the sum which would otherwise be available for the
purchase of insurance. The insurer may defer payment for not more than three
months after the application for the cash surrender value is made. This section
shall not apply to term insurance policies of twenty years or less, but such
term policy shall specify the mortality table, rate of interest and method of
valuation adopted for computing reserves.

HISTORY: Code 1950, § 38-375; 1952, c. 317, § 38.1-460; 1986, c. 562.