                                 CODE OF VIRGINIA

NONFORFEITURE BENEFITS, CASH SURRENDER VALUES, CERTIFICATE LOANS AND OTHER
OPTIONS (§ 38.2-4120)

A. A society may grant paid-up nonforfeiture benefits, cash surrender values,
certificate loans, and any other options its laws permit. Certificates issued on
and after June 28, 1968, must contain at least one paid-up nonforfeiture
benefit, except in the case of pure endowment, annuity or reversionary annuity
contracts, reducing term insurance contracts or contracts of level term
insurance for fifteen years or less expiring before age sixty-six.

B. For certificates, other than those for which reserves are computed on the
Commissioners 1941 Standard Ordinary Mortality Table, the Commissioners 1941
Standard Industrial Table or the Commissioners 1958 Standard Ordinary Mortality
Table, or any more recent table made applicable to life insurance companies, the
value of every paid-up nonforfeiture benefit and the amount of any cash
surrender value, loan or other option granted shall not be less than any excess
of (1) over (2) as follows:

   1. The reserve under the certificate determined on the basis specified in the
   certificate; and

   2. The sum of any indebtedness to the society on the certificate, including
   interest due and accrued, and a surrender charge equal to 2 1/2% of the face
   amount of the certificate, which, in the case of insurance on the lives of
   persons under the minimum age for adult membership, shall be the ultimate face
   amount of the certificate, if death benefits provided in the certificate are
   graded.

C. For certificates issued on a substandard basis or for certificates with
reserves computed upon the American Men Ultimate Table of Mortality, the term of
any extended insurance benefit granted, including any accompanying pure
endowment, may be computed upon the rates of mortality not greater than 130
percent of those shown by the mortality table specified in the certificate for
the computation of the reserve.

D. For certificates with reserves computed on the Commissioners 1941 Standard
Ordinary Mortality Table, the Commissioners 1941 Standard Industrial Table or
the Commissioners 1958 Standard Ordinary Mortality Table, or any more recent
table made applicable to life insurance companies, every paid-up nonforfeiture
benefit and the amount of any cash surrender value, loan or other option granted
shall not be less than the corresponding amount ascertained in accordance with
the provisions of the laws of this Commonwealth applicable to life insurers
issuing policies containing like insurance benefits based upon such tables.

HISTORY: 1968, c. 654, § 38.1-638.34; 1975, c. 262; 1986, c. 562.