§146. Nonforfeiture benefits

A. From and after twelve o'clock noon of October 1, 1948, no policy of industrial life insurance, other than a term policy of twenty years or less, shall be issued or delivered in this state unless the same shall contain in substance the following provisions: that in the event of default of premium payments, after premiums have been paid for five years, the insured shall be entitled to a stipulated form of insurance, or a cash value, the net value of which shall be at least equal to two-thirds of the reserve on the policy at the end of the policy quarter year nearest to the date to which premiums have been paid, computed in accordance with R.S. 22:751 from which any existing indebtedness to the company on or secured by the policy shall be deducted, provided that the said reserve shall not be less than the legal minimum standard, as provided in this Code, for such valuation of policies, and that in computing paid-up or extended insurance granted as a nonforfeiture benefit under this section, the insurer may use single premiums based upon the Standard Industrial Table of Mortality with interest at not more than three and one-half percent per annum.

B. Within eight weeks after the due date of the first defaulted premium on policies of industrial life insurance on which premiums have been paid for five full years, application shall be made in writing by the assured, on blanks to be furnished by the insurer at the insured's request for that purpose, for paid-up insurance, payable at the same time, and under the same conditions, except as to payment of premiums, as the original policy, or for the continuance of the insurance in force at its full amount, less any indebtedness to the insurer, for such period as the net reserve will purchase, or for cash value of the policy, all computed as provided in this Section. The term of temporary insurance herein provided for shall include the period of grace, if any. If no option herein provided for shall be availed of by the assured, the reserve herein provided, without further action on the part of the assured, shall be applied either to purchase paid-up insurance or to continue the insurance in force at its full amount as provided in this Section. However, in the case of any endowment policy, if the sum applicable to the purchase of temporary insurance be more than sufficient to continue the insurance to the end of the endowment term named in the policy the excess shall be used to purchase in the same amount pure endowment insurance payable at the end of the endowment term named in the policy under the conditions on which the original policy was issued. The policy shall state which of the two forms will be automatic. In calculating nonforfeiture values as herein provided there shall be included all dividend additions from participating policies.

C. The insurer shall, at any time after five full years' premiums have been paid at the request of the insured in writing, furnish the insured with a statement showing the nonforfeiture benefits available under his policy in terms of dollars, and years, months and days of insurance protection, unless this information is shown by appropriate tables in his policy.

D. Any condition or stipulation in any policy of industrial life insurance contrary to the provisions of this section, or any attempted waiver of such provisions shall be void. Nothing in this section shall limit the right of industrial life insurers to include multiple indemnity benefits in any policy issued by them.

E. A table or tables showing the cash value and the insurance available as an automatic option must be included in each policy, except funeral policies which must contain a table showing the insurance available as an automatic option.

Acts 1958, No. 125. Amended by Acts 1958, No. 93, §1; Acts 1974, No. 4, §2; Redesignated from R.S. 22:256 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 503, §1.