                                 CODE OF VIRGINIA

LOAN PROVISIONS IN POLICIES ISSUED PRIOR TO OPERATIVE DATE STATED IN §
38.2-3214 (§ 38.2-3217)

For those policies issued prior to the operative date stated in § 38.2-3214,
the loan value referred to in former § 38.1-397 shall be the reserve at the end
of the current policy year on the policy and on any dividend additions to the
policy, exclusive of the reserve on account of return premium insurance and of
total and permanent disability and additional accidental death benefits, less a
sum not more than 2 1/2 percent of the amount insured by the policy and of any
dividend additions to the policy. The policy shall specify the mortality table
and rates of interest adopted for computing the reserve. The policy may further
provide that the loan may be deferred for up to three months after the
application for the loan is made. Instead of permitting the deduction from a
loan on the policy of a sum not more than 2 1/2 percent of the amount insured by
the policy and of any dividend additions to the policy, an insurer may insert in
the policy a provision that one-fifth of the reserve may be deducted in case of
a loan under the policy, or may provide in the policy that the deduction may be
2 1/2 percent of the amount insured by the policy or one-fifth of the reserve,
at the insurer&#8217;s option.

HISTORY: Code 1950, § 38-384; 1952, c. 317, § 38.1-469; 1986, c. 562.