Vermont § 4480 - Provisions; standard and prohibited

§ 4480. Provisions; standard and prohibited

• (a) After one year from November 22, 1959, no life benefit certificate shall be delivered
  or issued for delivery in this State unless a copy of the form shall have been filed
  with the Commissioner of Financial Regulation. Each filing of a policy, contract,
  endorsement, rider, or certificate shall be accompanied by payment to the Commissioner
  of a nonrefundable fee of $50.00 per filing submission. (b) The certificate shall contain in substance the following standard provisions or, in
  lieu thereof, provisions that are more favorable to the member: (1) title on the face and filing page of the certificate clearly and correctly describing
  its form; (2) a provision stating the amount of rates, premiums, or other required contributions,
  by whatever name known, that are payable by the insured under the certificate; (3) a provision that the member is entitled to a grace period of not less than a full
  month (or 30 days at the option of the society) in which the payment of any premium
  after the first, may be made. During the grace period, the certificate shall continue
  in full force, but if the certificate becomes a claim during the grace period before
  the overdue payment is made, the amount of the overdue payment or payments may be
  deducted in any settlement under the certificate; (4) a provision that the member shall be entitled to have the certificate reinstated at
  any time within three years from the due date of the premium in default, unless the
  certificate has been completely terminated through the application of a nonforfeiture
  benefit, cash surrender value, or certificate loan, upon the production of evidence
  of insurability satisfactory to the society and the payment of all overdue premiums
  and any other indebtedness to the society upon the certificate, together with interest
  on the premiums and the indebtedness, if any, at a rate not exceeding six percent
  a year compounded annually; (5) except in the case of pure endowment, annuity, or reversionary annuity contracts,
  reducing term insurance contracts, or contracts of term insurance of uniform amount
  of 15 years or less expiring before age 66, a provision that, in the event of default
  in payment of any premium after three full years’ premiums have been paid or after
  premiums for a lesser period have been paid if the contract so provides, the society
  will grant, upon proper request not later than 60 days after the due date of the premium
  in default, a paid-up nonforfeiture benefit on the plan stipulated in the certificate,
  effective as of the due date, of the value as specified in this chapter. The certificate
  may provide, if the society’s laws so specify or if the member shall so elect prior
  to the expiration of the grace period of any overdue premium, that default shall not
  occur so long as premiums can be paid under the provisions of an arrangement for automatic
  premium loan as may be set forth in the certificate; (6) a provision that one paid-up nonforfeiture benefit as specified in the certificate
  shall become effective automatically unless the member elects another available paid-up
  nonforfeiture benefit, not later than 60 days after the due date of the premium in
  default; (7) a statement of the mortality table and rate of interest used in determining all paid-up
  nonforfeiture benefits and cash surrender options available under the certificate,
  and a brief general statement of the method used in calculating the benefits; (8) a table showing in figures the value of every paid-up nonforfeiture benefit and cash
  surrender option available under the certificate for each certificate anniversary
  either during the first 20 certificate years or during the term of the certificate,
  whichever is shorter; (9) a provision that the certificate shall be incontestable after it has been in force
  during the lifetime of the member for a period of two years from its date of issue
  except for nonpayment of premiums, violation of the provisions of the certificate
  relating to military, aviation, or naval service; and violation of the provisions
  relating to suspension or expulsion as substantially set forth in the certificate.
  At the option of the society, supplemental provisions relating to benefits in the
  event of temporary or permanent disability or hospitalization and provisions that
  grant additional insurance specifically against death by accident or accidental means
  may also be accepted. The certificate shall be incontestable on the ground of suicide
  after it has been in force during the lifetime of the member for a period of two years
  from date of issue. The certificate may provide as to statements made to procure reinstatement
  that the society has the right to contest a reinstated certificate within a period
  of two years from date of reinstatement with the same exceptions as provided in this
  section; (10) a provision that in case the age or sex of the member or of any other person is considered
  in determining the premium and it is found at any time before final settlement under
  the certificate that the age or sex has been misstated, and the discrepancy and premium
  involved have not been adjusted, the amount payable shall be such as the premium would
  have purchased at the correct age and sex; but if the correct age was not in an insurable
  age under the society’s charter or laws, only the premiums paid to the society, less
  any payments previously made to the member, shall be returned or, at the option of
  the society, the amount payable under the certificate shall be such as the premium
  would have purchased at the correct age according to the society’s promulgated rates
  and any extension thereof based on actuarial principles; (11) a provision or provisions that recite fully, or that set forth the substance of, all
  sections of the charter, constitution, laws, rules, or regulations of the society,
  in force at the time of issuance of the certificate, the violation of which will result
  in the termination of, or in the reduction of, the benefit or benefits payable under
  the certificate; (12) if the constitution or laws of the society provide for expulsion or suspension of
  a member, any member so expelled or suspended, except for nonpayment of a premium
  or within the contestable period for material misrepresentations in the member’s application
  for membership shall have the privilege of maintaining the member’s insurance in force
  by continuing payment of the required premium; and any of the foregoing provisions
  or portions thereof not applicable by reason of the plan of insurance or because the
  certificate is an annuity certificate may, to the extent inapplicable, be omitted
  from the certificate. (c) After one year from November 22, 1959, no life benefit certificate shall be delivered
  or issued for delivery in this State containing in substance any of the following
  provisions: (1) any provision limiting the time within which any civil action may be commenced to
  less than two years after the cause of action accrues; (2) any provision by which the certificate shall purport to be issued or to take effect
  more than six months before the original application for the certificate was made,
  except in case of transfer from one form of certificate to another in connection with
  which the member is to receive credit for any reserve accumulation under the form
  of certificate from which the transfer is made; or (3) any provision for forfeiture of the certificate for failure to repay any loan thereon
  or to pay interest on the loan while the total indebtedness, including interest, is
  less than the loan value of the certificate. (d) The word “premiums” as used in this chapter means premiums, rates, or other required
  contributions by whatever name known. (Added 1959, No. 197, § 20, eff. Nov. 22, 1959; amended 1989, No. 225 (Adj. Sess.), § 25; 1991, No. 166 (Adj. Sess.), § 6; 1995, No. 180 (Adj. Sess.), § 38; 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012; 2021, No. 105 (Adj. Sess.), § 194, eff. July 1, 2022.)