§ 44-407.26 — Policies issued on or after January 1, 1985; cash surrender value; nonforfeiture benefits; determination

Nebraska § 44-407.26

• Jurisdiction: Nebraska
• Ch. 44: Insurance

Text

This section, in addition to all other applicable provisions of sections 44-407 to 44-407.06 , 44-407.08 , 44-407.09 , 44-407.24
to 44-407.26 , and 44-8907 ,
shall apply to all policies issued on or after January 1, 1985. Any cash surrender
value available under the policy in the event of default in a premium payment
due on any policy anniversary shall be in an amount which does not differ
by more than two-tenths of one percent of either the amount of insurance,
if the insurance be uniform in amount, or the average amount of insurance
at the beginning of each of the first ten policy years, from the sum of (a)
the greater of zero and the basic cash value specified in this section and
(b) the present value of any existing paid-up additions less the amount of
any indebtedness to the company under the policy.
The basic cash value shall be equal to the present value, on such anniversary,
of the future guaranteed benefits which would have been provided for by the
policy, excluding any existing paid-up additions and before deduction of any
indebtedness to the company, if there had been no default, less the then present
value of the nonforfeiture factors, as hereinafter defined, corresponding
to premiums which would have fallen due on and after such anniversary; Provided, however, that the effects on the basic
cash value of supplemental life insurance or annuity benefits or of family
coverage, as described in section 44-407.02 or 44-407.04 , whichever is applicable,
shall be the same as are the effects specified in section 44-407.02 or 44-407.04 ,
whichever is applicable, on the cash surrender values defined in that section.
The nonforfeiture factor for each policy year shall be an amount equal
to a percentage of the adjusted premium for the policy year, as defined in
section 44-407.04 or 44-407.24 , whichever is applicable. Except as is required
by the next succeeding sentence of this paragraph, such percentage (a) must
be the same percentage for each policy year between the second policy anniversary
and the later of (i) the fifth policy anniversary and (ii) the first policy
anniversary at which there is available under the policy a cash surrender
value in an amount, before including any paid-up additions and before deducting
any indebtedness, of at least two-tenths of one percent of either the amount
of insurance, if the insurance be uniform in amount, or the average amount
of insurance at the beginning of each of the first ten policy years, and (b)
must be such that no percentage after the later of the two policy anniversaries
specified in the preceding item (a) may apply to fewer than five consecutive
policy years. No basic cash value may be less than the value which would be
obtained if the adjusted premiums for the policy, as defined in section 44-407.04
or 44-407.24 , whichever is applicable, were substituted for the nonforfeiture
factors in the calculation of the basic cash value.
All adjusted premiums and present values referred to in this section
shall for a particular policy be calculated on the same mortality and interest
bases as are used in demonstrating the policy's compliance with the other
sections of this Standard Nonforfeiture Law for Life Insurance. The cash surrender
values referred to in this section shall include any endowment benefits provided
for by the policy.
Any cash surrender value available other than in the event of default
in a premium payment due on a policy anniversary, and the amount of any paid-up
nonforfeiture benefit available under the policy in the event of default in
a premium payment shall be determined in manners consistent with the manners
specified for determining the analogous minimum amounts in sections 44-407.01
to 44-407.03 , 44-407.05 , and 44-407.24 . The amounts of any cash surrender
values and of any paid-up nonforfeiture benefits granted in connection with
additional benefits such as those listed in section 44-407.05 shall conform
with the principles of this section.

Legislative History

Source: Laws 1981, LB 355, § 13; Laws 2014, LB755, § 16.