20-1210. Nonforfeiture options in old
policies
A. There shall be a provision specifying the option to which the policyholder is
entitled in the event of default in a premium payment after three full annual premiums
have been paid. This provision shall not be required in term insurance of twenty years
or less, for which uniform premiums are payable during the entire term of the policy, nor
to any term policy of decreasing amount. A provision may also be inserted in the policy
that in the event of default in a premium payment before such options become available
the reserve on any dividend addition then in force may at the option of the insurer be
paid in cash or applied as a net premium to the purchase of paid-up term insurance for
any amount not in excess of the face of the original policy.
B. This section shall not apply to policies issued on or after the operative date
of section 20-1231.
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