Find Laws Find Lawyers Free Legal Forms USA State Laws

NORTH CAROLINA STATUTES AND CODES

§ 58-60-10. Definitions.

§ 58‑60‑10. Definitions.

Unless the context of useindicates a different meaning, for the purposes of this Part, the followingdefinitions shall apply:

(1)        Buyer's Guide. – ABuyer's Guide is a document furnished pursuant to G.S. 58‑60‑15,which shall contain all the requirements of and be in substantial compliancewith G.S. 58‑60‑25.

(2)        Cash Dividend. – ACash Dividend is the current illustrated dividend which can be applied towardpayment of gross premium.

(3)        Equivalent LevelAnnual Dividend. – The Equivalent Level Annual Dividend is calculated byapplying the following steps:

a.         Accumulate theannual cash dividends at five percent (5%) interest compounded annually to theend of the 10th and 20th policy years;

b.         Divide eachaccumulation of paragraph a of this subdivision by an interest factor thatconverts it into one equivalent level annual amount that, if paid at thebeginning of each year, would accrue to the values in paragraph a of thissubdivision over the respective periods stipulated in paragraph a of thissubdivision. If the period is 10 years, the factor is 13.207 and if the periodis 20 years, the factor is 34.719.

c.         Divide the resultsof paragraph b of this subdivision by the number of thousands of the EquivalentLevel Death Benefit to arrive at the Equivalent Level Annual Dividend.

(4)        Equivalent LevelDeath Benefit. – The Equivalent Level Death Benefit of a policy or term lifeinsurance rider is an amount calculated as follows:

a.         Accumulate theguaranteed amount payable upon death, regardless of the cause of death, at thebeginning of each policy year for 10 and 20 years at five percent (5%) interestcompounded annually to the end of the 10th and 20th policy years respectively;

b.         Divide eachaccumulation of paragraph a of this subdivision by an interest factor thatconverts it into one equivalent level annual amount that, if paid at thebeginning of each year, would accrue to the value in paragraph a of thissubdivision over the respective periods stipulated in paragraph a of thissubdivision. If the period is 10 years, the factor is 13.207 and if the periodis 20 years, the factor is 34.719.

(5)        Generic Name. –Generic Name means a short title which is descriptive of the premium andbenefit patterns of a policy or a rider.

(6)        Life Insurance CostIndexes. –

a.         Life InsuranceSurrender Cost Index. The Life Insurance Surrender Cost Index is calculated byapplying the following steps:

1.         Determine theguaranteed cash surrender value, if any, available at the end of the 10th and20th policy years;

2.         For participatingpolicies, add the terminal dividend payable upon surrender, if any, to theaccumulation of the annual Cash Dividends at five percent (5%) interestcompounded annually to the end of the period selected and add this sum to theamount determined in subdivision a;

3.         Divide the result ofsubparagraph 2 (subparagraph 1 for guaranteed‑cost policies) by aninterest factor that converts it into an equivalent level annual that, if paidat the beginning of each year, would accrue to the value in subparagraph 2(subparagraph 1 for guaranteed‑cost policies) over the respective periodsstipulated in subparagraph 1. If the period is 10 years, the factor is 13.207and if the period is 20 years, the factor is 34.719;

4.         Determine theequivalent level premium by accumulating each annual premium payable for thebasic policy or rider at five percent (5%) interest compounded annually to theend of the period stipulated in subparagraph 1 and dividing the result by therespective factors stated in subparagraph 3 (this amount is the annual premiumpayable for a level premium plan);

5.         Subtract the resultof subparagraph 3 from subparagraph 4;

6.         Divide the result ofsubparagraph 5 by the number of thousands of the Equivalent Level Death Benefitto arrive at the Life Insurance Surrender Cost Index.

b.         Life Insurance NetPayment Cost Index. The Life Insurance Net Payment Cost Index is calculated inthe same manner as the comparable Life Insurance Cost Index except that thecash surrender value and any terminal dividend are set at zero.

(7)        Policy Summary. –Policy Summary means a written statement describing the elements of the policyincluding but not limited to:

a.         A prominently placedtitle in at least 10‑point boldface capital letters as follows: STATEMENTOF POLICY COST AND BENEFIT INFORMATION;

b.         The name and addressof the insurance agent, or, if no agent is involved, a statement of theprocedure to be followed in order to receive responses to inquiries regardingthe Policy Summary;

c.         The full name andhome office or administrative office address of the company in which the lifeinsurance policy is to be or has been written;

d.         The Generic Name ofthe basic policy and each rider;

e.         The followingamounts, where applicable, for the first five policy years and representativepolicy years thereafter sufficient to clearly illustrate the premium andbenefit patterns, including, but not necessarily limited to, the years forwhich Life Insurance Cost Indexes are displayed and at least one age from 60through 65 or maturity, whichever is earlier:

1.         The annual premiumfor the basic policy;

2.         The annual premiumfor each optional rider;

3.         Guaranteed amountpayable upon death, at the beginning of the policy year regardless of the causeof death other than suicide, or other specifically enumerated exclusions, whichis provided by the basic policy and each optional rider, with benefits providedunder the basic policy and each rider shown separately;

4.         Total guaranteedcash surrender values at the end of the year with values shown separately forthe basic policy and each rider;

5.         Cash Dividendspayable at the end of the year with values shown separately for the basicpolicy and each rider. (Dividends need not be displayed beyond the 20th policyyear);

6.         Guaranteed endowmentamounts payable under the policy which are not included under guaranteed cashsurrender values above.

f.          The effectivepolicy loan annual percentage interest rate, if the policy contains thisprovision, specifying whether this rate is applied in advance or in arrears. Ifthe policy loan interest rate is variable, the Policy Summary includes themaximum annual percentage rate;

g.         Life Insurance CostIndexes for 10 and 20 years but in no case beyond the premium paying period.Separate indexes must be displayed for the basic policy and for each optionalterm life insurance rider. Such indexes need not be included for optionalriders which are limited to benefits such as accidental death benefits,disability waiver of premium, preliminary term life insurance coverage of lessthan 12 months and guaranteed insurability benefits nor for basic policies oroptional riders covering more than one life;

h.         The Equivalent LevelAnnual Dividend, in the case of participating policies and participatingoptional term life insurance riders, under the same circumstances and for thesame durations at which Life Insurance Cost Indexes are displayed;

i.          A Policy Summarywhich includes dividends shall also include a statement that dividends arebased on the company's current dividend scale and are not guaranteed inaddition to a statement in close proximity to the Equivalent Level AnnualDividend as follows: An explanation of the intended use of the Equivalent LevelAnnual Dividend is included in the Life Insurance Buyer's Guide;

j.          A statement inclose proximity to the Life Insurance Cost Indexes as follows: An explanationof the intended use of these indexes is provided in the Life Insurance Buyer'sGuide.

k.         The date on whichthe Policy Summary is prepared.

ThePolicy Summary must consist of a separate document. All information required tobe disclosed must be set out in such a manner as to not minimize or render anyportion thereof obscure. Any amounts which remain level for two or more yearsof the policy may be represented by a single number if it is clearly indicatedwhat amounts are applicable for each policy year. Amounts in subparagraph e ofthis paragraph shall be listed in total, not on a per thousand nor per unitbasis. If more than one insured is covered under one policy or rider,guaranteed death benefits shall be displayed separately for each insured or foreach class of insureds if death benefits do not differ within the class. Zeroamounts shall be displayed as zero and shall not be displayed as a blank space.If the insurer makes a material revision in the terms and conditions underwhich it will limit its right to change any nonguaranteed factor, it shall, nolater than the first policy anniversary following the revision, advise eachaffected policy owner residing in this State. (1979, c. 447; 2005‑234, ss. 1.5, 1.6.)

North Carolina Forms by Issue

North Carolina Gun Forms
North Carolina Real Estate Forms
North Carolina Tax Forms

North Carolina Law

North Carolina State Laws
    > North Carolina Child Support
    > North Carolina Gun Laws
    > North Carolina Statute
North Carolina Tax
    > North Carolina State Tax
North Carolina Labor Laws
    > North Carolina Unemployment
North Carolina Agencies
    > North Carolina Department of Corrections
    > North Carolina DMV
    > North Carolina Employment Security Commission
    > North Carolina Real Estate
    > North Carolina Secretary of State

North Carolina Court Map

Tips