211 CMR, § 95.09 - Insurance Policy Requirements - Optional Policy Provisions
The following provisions may in substance be included in a variable life insurance policy or related form delivered or issued for delivery in the Commonwealth:
(1) A provision
that the amount of any dividend:
(a) may be
applied to provide paid-up amounts of additional general account or variable
life insurance;
(b) may be
deposited in the general account at a stated minimum rate of interest allowed
by the company;
(c) may be applied
to provide paid-up amounts of general account or variable one-year term
insurance;
(d) may be paid in
cash;
(e) may be applied in
reduction of premiums;
(f) may be
deposited as a variable deposit in the separate account.
(2) A provision allowing for incidental
insurance benefits, which may be offered on a fixed or variable
basis.
(3) A provision allowing the
policyholder to elect in writing in the policy application or thereafter an
automatic premium loan on a basis not less favorable than that required of
policy loans, partial withdrawals or partial surrenders, except that payment
under this provision is restricted to no more than the premiums required for a
period of 12 months absent separate notification to the policyholder. Such
notification shall be sent by certified mail, shall inform the policyholder of
the duration and amount of the loan, and shall provide a mailing address and
local or toll-free telephone number at which the policyholder can advise the
insurer of any intention to cancel further automatic premium loans. Such
notification shall be sent to the policyholder no less frequently than annually
in the event of continuing automatic premium loans, and shall be mailed
separately from any other notice, information or report mailed to the
policyholder by the insurer.
(4) An
exclusion for suicide within two years of the issue date of the policy
provided, however, that to the extent of increased death benefits only, the
policy may provide an exclusion for suicide within two years of the effective
date of any increase in death benefits that results from an application or
request of the owner subsequent to the policy issue date, and was subject to
satisfactory proof of the insured's insurability.
(5) A provision allowing the policyholder to
make partial surrenders or partial withdrawals. Any such provision shall
provide that the policyholder may request part of the net cash surrender value
in which case both the variable and minimum death benefits will be reduced
commensurate with the percentage of the net cash surrender value received by
the policyholder and the premium for the remaining amount of insurance will
also be reduced to the appropriate rates for the reduced amount of insurance.
The policy may provide that a partial surrender provision shall not require the
insurer to reduce the amount of the minimum death benefit to less than the
lowest amount of minimum death benefit which could have been issued to the
insured under the insurer's rules at the time the policy was issued. The policy
must clearly provide that the policyholder has the option of electing to
exercise the policy loan or partial withdrawal provision rather than the
partial surrender provision.
(6) A
provision that if at any time, so long as the policy is in force other than
under a nonforfeiture benefit, the variable death benefit is less than it would
have been if no loan or withdrawal had ever been made, the policyholder may
increase such variable death benefit up to what it would have been if there had
been no loan or withdrawal by paying an amount not exceeding 110% of the
corresponding increase in cash surrender value and by furnishing such evidence
of insurability as the insurer may request.
(7) The policy may specify a reasonable
minimum amount which may be borrowed at any time but such minimum shall not
apply to any automatic premium loan provision.
(8) Any other policy provision approved by
the Commissioner.
Notes
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