                                 CODE OF VIRGINIA

STANDARD NONFORFEITURE LAW; REQUIRED POLICY PROVISIONS (§ 38.2-3202)

A. On and after the operative date stated in § 38.2-3214, no life insurance
policy, except as stated in § 38.2-3213, shall be delivered or issued for
delivery in this Commonwealth unless it contains in substance the following
provisions and statements, or corresponding provisions and statements that in
the opinion of the Commission (i) are at least as favorable to the defaulting or
surrendering policyholder and (ii) essentially comply with § 38.2-3212:

   1. That in the event of default in any premium payment, the insurer will
   grant, upon proper request not later than sixty days after the due date of the
   premium in default, a paid-up nonforfeiture benefit on a plan stipulated in
   the policy, effective as of the due date, in the amount specified in this
   article. Instead of the stipulated paid-up nonforfeiture benefit, the insurer
   may substitute, upon proper request not later than sixty days after the due
   date of the premium in default, an actuarially equivalent alternative paid-up
   nonforfeiture benefit that provides a greater amount or longer period of death
   benefits or, if applicable, a greater amount or earlier payment of endowment
   benefits.

   2. That upon surrender of the policy within sixty days after the due date of
   any premium payment in default, after premiums have been paid for at least
   three full years for ordinary insurance or five full years for industrial
   insurance, the insurer will pay, instead of any paid-up nonforfeiture benefit,
   a cash surrender value in the amount specified in this chapter.

   3. That a specified paid-up nonforfeiture benefit shall become effective as
   specified in the policy unless the person entitled to make an election selects
   another available option not later than sixty days after the due date of the
   premium in default.

   4. That for a policy paid up by completion of all premium payments or
   continued under any paid-up nonforfeiture benefit that became effective on or
   after the third policy anniversary for ordinary insurance or the fifth policy
   anniversary for industrial insurance, the insurer will pay, upon surrender of
   the policy within thirty days after any policy anniversary, a cash surrender
   value in the amount specified in this article.

   5. For policies that provide on a basis guaranteed in the policy unscheduled
   changes in benefits or premiums, or both, or that provide an option for
   changes in benefits or premiums, or both, other than a change to a new policy,
   a statement of the mortality table, interest rate, and method used in
   calculating cash surrender values and the paid-up nonforfeiture benefits
   available under the policy. All other policies shall include a statement of
   the mortality table and interest rate used in calculating the cash surrender
   values and the paid-up nonforfeiture benefits available under the policy,
   together with a table showing any cash surrender value and any paid-up
   nonforfeiture benefit available under the policy on each policy anniversary
   either during the first twenty policy years or during the term of the policy,
   whichever is shorter. The values and benefits referred to in this subdivision
   shall be calculated upon the assumption that there are no dividends or paid-up
   additions credited to the policy and that there is no indebtedness to the
   insurer on the policy.

   6. A brief and general statement of the method to be used in calculating the
   cash surrender value and the paid-up nonforfeiture benefits available under
   the policy on any policy anniversary beyond the last anniversary for which the
   values and benefits are consecutively shown in the policy, with an explanation
   of how the existence of any paid-up additions credited to the policy or any
   indebtedness to the insurer on the policy affects the cash surrender values
   and the paid-up nonforfeiture benefits.

B. To the extent that any of the foregoing provisions are not applicable to the
plan of insurance, they may be omitted from the policy with the approval of the
Commission.

C. The insurer shall reserve the right to defer the payment of any cash
surrender value for no more than six months after demand for the cash surrender
value and surrender of the policy.

HISTORY: Code 1950, § 38-376; 1952, c. 317, § 38.1-461; 1982, c. 228; 1986, c.
562.