§ 26.1-33-18 — Nonforfeiture benefits

In the case of policies issued after December 31, 1978, a life insurance policy, except as
stated in section 26.1-33-28, may not be delivered or issued for delivery in this state unless it
contains in substance the following provisions, or corresponding provisions which are at least as
favorable to the defaulting or surrendering policyholder as are the minimum requirements
specified in this section and are essentially in compliance with section 26.1-33-27:
1. In the event of default in any premium payment, the insurer will grant, upon proper
request not later than sixty days after the due date of the premium in default, a paid-up
nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of
the amount as may be hereinafter specified. In lieu of the stipulated paid-up
nonforfeiture benefit, the insurer may substitute, upon proper request not later than
sixty days after the due date of the premium in default, an actuarially equivalent
alternative paid-up nonforfeiture benefit that provides a greater amount or longer
period of death benefits or, if applicable, a greater amount or earlier payment of
endowment benefits.
2. Upon surrender of the policy within sixty days after the due date of any premium
payment in default after premiums have been paid for at least three full years in the
case of ordinary insurance or five full years in the case of industrial insurance, the
insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of
the amount as may be hereinafter specified.
3. A specified paid-up nonforfeiture benefit becomes effective as specified in the policy
unless the person entitled to make the election elects another available option not later
than sixty days after the due date of the premium in default.
4. If the policy has become paid up by completion of all premium payments or if it is
continued under any paid-up nonforfeiture benefit which became effective on or after
the third policy anniversary in the case of ordinary insurance or the fifth policy
anniversary in the case of industrial insurance, then the insurer will pay, upon
surrender of the policy within thirty days after any policy anniversary, a cash surrender
value of the amount as may be hereinafter specified.
5. In the case of policies which cause on a basis guaranteed in the policy unscheduled
changes in benefits or premiums, or which provide an option for changes in benefits or
premiums other than a change to a new policy, a statement of the mortality table,
interest rate, and method used in calculating cash surrender values and the paid-up
nonforfeiture benefits available under the policy. In the case of all other policies, a
statement of the mortality table and interest rate or rates used in calculating the cash
surrender values and the paid-up nonforfeiture benefits available under the policy,
together with a table showing the cash surrender value, if any, and paid-up
nonforfeiture benefit, if any, available under the policy on each policy anniversary
either during the first twenty policy years or during the term of the policy, whichever is
shorter, such values and benefits to be calculated upon the assumption that there are
no dividends or paid-up additions credited to the policy and that there is no
indebtedness to the insurer on the policy.
6. A statement that the cash surrender values and the paid-up nonforfeiture benefits
available under the policy are not less than the minimum values and benefits required
by or pursuant to the insurance law of the state in which the policy is delivered. An
explanation of the manner in which the cash surrender values and the paid-up
nonforfeiture benefits are altered by the existence of any paid-up additions credited to
the policy or any indebtedness to the insurer on the policy. If a detailed statement of
the method of computation of the values and benefits shown in the policy is not stated
in the policy, a statement that the method of computation has been filed with the
commissioner. A statement of the method to be used in calculating the cash surrender
value and paid-up nonforfeiture benefit available under the policy on any policy

anniversary beyond the last anniversary for which such values and benefits are
consecutively shown in the policy.
Any of the foregoing provisions or portions thereof not applicable by reason of the plan of
insurance may, to the extent inapplicable, be omitted from the policy.
The insurer shall reserve the right to defer the payment of any cash surrender value for a
period of six months after demand therefor with surrender of the policy.