38.2-3217 - Loan provisions in policies issued prior to operative date stated in § 38.2-3214. - Virginia Statutes

§ 38.2-3217. Loan provisions in policies issued prior to operative datestated in § 38.2-3214.

For those policies issued prior to the operative date stated in § 38.2-3214,the loan value referred to in former § 38.1-397 shall be the reserve at theend of the current policy year on the policy and on any dividend additions tothe policy, exclusive of the reserve on account of return premium insuranceand of total and permanent disability and additional accidental deathbenefits, less a sum not more than 2 1/2 percent of the amount insured by thepolicy and of any dividend additions to the policy. The policy shall specifythe mortality table and rates of interest adopted for computing the reserve.The policy may further provide that the loan may be deferred for up to threemonths after the application for the loan is made. Instead of permitting thededuction from a loan on the policy of a sum not more than 2 1/2 percent ofthe amount insured by the policy and of any dividend additions to the policy,an insurer may insert in the policy a provision that one-fifth of the reservemay be deducted in case of a loan under the policy, or may provide in thepolicy that the deduction may be 2 1/2 percent of the amount insured by thepolicy or one-fifth of the reserve, at the insurer's option.

(Code 1950, § 38-384; 1952, c. 317, § 38.1-469; 1986, c. 562.)