Every life or endowment insurance policy, other than a term life policy for twenty years or less and an industrial life insurance policy with coverage of one thousand two hundred fifty dollars or less, pursuant to the provisions of R.S. 22:146, issued on or after January 1, 1907, by a legal reserve life insurance company, after being in force for three full years, shall not be forfeited without value for the nonpayment of any subsequent premiums or for policy loan indebtedness or the interest thereon, unless the company exercises its option provided in R.S. 22:936(H). The nonforfeiture value per hundred dollars of coverage under the policy is determined as the sum of the legal reserve and accumulated dividends, less any policy loan indebtedness and a surrender charge equal to the greater o
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Every life or endowment insurance policy, other than a term life policy for twenty years or less and an industrial life insurance policy with coverage of one thousand two hundred fifty dollars or less, pursuant to the provisions of R.S. 22:146, issued on or after January 1, 1907, by a legal reserve life insurance company, after being in force for three full years, shall not be forfeited without value for the nonpayment of any subsequent premiums or for policy loan indebtedness or the interest thereon, unless the company exercises its option provided in R.S. 22:936(H). The nonforfeiture value per hundred dollars of coverage under the policy is determined as the sum of the legal reserve and accumulated dividends, less any policy loan indebtedness and a surrender charge equal to the greater of one-fifth of the legal reserve or two dollars and fifty cents. Unless the policy owner elects one of the other nonforfeiture options within the policy, the nonforfeiture value as determined in this Section shall be applied towards the policy's automatic nonforfeiture option. The automatic nonforfeiture option shall be the purchase of paid up life or endowment insurance on the same life at the age at the time of forfeiture and under the same terms, except as to the payment of premiums, as the original policy, or to continue the insurance in force at its full amount, including the amount of accumulated dividends, less any existing policy loan indebtedness; however, such surrender value will purchase nonparticipating temporary insurance at net single premium rates using the standard as prescribed by the insurer, at the age at the time of forfeiture, provided that in the case of an endowment policy, if the sum needed to purchase temporary insurance is more than that needed to continue the insurance to the end of the policy's endowment term, the excess shall be used to purchase pure endowment insurance payable at the end of the policy's endowment term using the purchase rates as prescribed by the insurer. When determining the net single premium rates for temporary insurance, the insurer may use one hundred thirty percent of the reserve mortality assumption as the mortality rate. This further provision shall not apply to any mortality table constructed on the basis of insurance company experience prior to 1900. Any attempted waiver of the provisions of this Section in any application, policy, or otherwise shall be void, and any value allowed in lieu thereof shall be at least equal to the net value of the temporary or pure endowment insurance as provided in this Section. The term of temporary insurance provided in this Section shall include the period of grace, if any.