The Vermont Statutes Online

Title 8 : Banking and Insurance

Chapter 103 : Life Insurance Policies and Annuity Contracts

Subchapter 003B : STANDARD NONFORFEITURE LAW FOR LIFE INSURANCE

• § 3770. Proration of values; net value of paid-up additions

  Any cash surrender value and any paid-up nonforfeiture benefit available under a policy in the event of default in a premium payment due at any time other than on the policy anniversary shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in sections 3763-3768 of this subchapter may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall not be less than the amounts used to provide such additions. Notwithstanding the provisions of section 3763 of this subchapter, additional benefits shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required under this subchapter, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits. As used in this section, “additional benefits” means benefits payable:

  (1) in the event of death or dismemberment by accident or accidental means;

  (2) in the event of total and permanent disability;

  (3) as reversionary annuity or deferred reversionary annuity benefits;

  (4) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this subchapter would not apply;

  (5) as term insurance in the life on a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the child turns 26 years of age, is uniform in amount after the child’s age is one year of age, and has not become paid-up by reason of the death of a parent of the child; or

  (6) as other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits. (Added 2015, No. 63, § 2, eff. June 17, 2015.)