§ 3745 - Calculation of adjusted premiums - Vermont Statutes

§ 3745. Calculation of adjusted premiums

(a) This section shall not apply to policies issued on or after the operative date of section 3747a of this title as defined therein. Except as provided in subsection 3746(b) of this title, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding any extra premiums charged because of impairments or special hazards, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:

(1) the then present value of the future guaranteed benefits provided for by the policy;

(a)(2) two percent of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy;

(3) 40 percent of the adjusted premium for the first policy year;

4) 25 percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

(b) Provided, however, that in applying the percentages specified in subdivisions (3) and (4) of this section, no adjusted premiums shall be deemed to exceed four percent of the amount of insurance or uniform amount equivalent thereto. The date of issue of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined. (1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 4, § 5); amended 1983, No. 55, § 3.)