Guam § 15314 - Life Insurer: Policy.

§ 15314. Life Insurer: Policy.

Every life policy form used by a domestic insurer shall be

approved by the Commissioner prior to such issuance as provided

in § 18306; provided that it shall contain in substance the

following provisions:

(a) A provision that the insured, after three (3) months’

premiums have been paid, is entitled to a premium grace

period of not less than thirty-one (31) days during which

period of grace the policy shall continue in full force;

provided that in case the policy becomes a claim during any

period of grace, the amount of such premium due may be

deducted from the amount payable under the claim;

(b) A provision that the policy shall be incontestable

after it has been in force during the lifetime of the insured for

a period of two (2) years from date of issue, except for

nonpayment of premium;

(c) A provision that the policy as issued shall constitute

the entire contract between the parties; provided that the

insurer may make the application for the policy a part of the

contract by endorsing it upon, or attaching it to, the policy;

(d) A provision that if the age of the insured has been

misstated, the contract shall be valid but the amount payable

under the policy shall be such as the premium would have

purchased at the correct age in accordance with the table of

premium rates of the insured;

(e) A provision that in the event of default of any

premium payment after three (3) full annual premiums shall

have been paid on such policy, the net value of such policy,

which net value shall be at least equal to its entire net reserve

at the date of default, less a surrender charge of not more than

two and one-half percent (2 ½%) of the face amount of the

policy and less any indebtedness to the company on or

secured by the policy, shall be applied as a single premium

to the purchase of one of the following forms of insurance,

unless the policy holder shall elect the cash surrender of the

policy:

(1) Paid-up term insurance for such a period as the

net value outlined above will purchase at the net single

premium at the attained age of the insured at the time of

the lapse;

(2) Paid-up insurance payable at the time and on

the conditions named in the policy for such an amount

as the net value outlined above will purchase at the net

single premium at the attained age of the insured at the

time of the lapse;

(f) A provision that in event of default of any premium

payment after three (3) full annual premiums shall have been

paid, the policy may be surrendered to the insurer within

sixty (60) days after date of premium default for a cash value

which shall be at least equal to the sum which would be

otherwise available for the purchase of paid-up insurance as

provided above if the insured so elects.