Standard Nonforfeiture Law for Life Insurance
808-4
© 2014 National Association of Insurance Commissioners
(1) The adjusted premiums for an otherwise similar policy issued at the same age without such term
insurance benefits, increased, during the period for which premiums for such term insurance
benefits are payable, by
(2) The adjusted premiums for such term insurance,
the foregoing Paragraphs (1) and (2) being calculated separately and as specified in Subsections A and B
except that, for the purposes of Subsection A(2), A(3) and A(4), the amount of insurance or equivalent
uniform amount of insurance used in the calculation of the adjusted premiums referred to in
Subsection A(2) shall be equal to the excess of the corresponding amount determined for the entire policy
over the amount used in the calculation of the adjusted premiums in Subsection C(1).
D. Except as otherwise provided in Sections 5a and 5b, all adjusted premiums and present values referred to in
this Act shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941
Standard Ordinary Mortality Table, provided that for any category of ordinary insurance issued on female
risks, adjusted premiums and present values may be calculated according to any age not more than three (3)
years younger than the actual age of the insured and such calculations for all policies of industrial insurance
shall be made on the basis of the 1941 Standard Industrial Mortality Table. All calculations shall be made
on the basis of the rate of interest, not exceeding three and one-half percent (3 1/2%) per annum, specified
in the policy for calculating cash surrender values and paid-up nonforfeiture benefits. Provided, however,
that in calculating the present value of any paid-up term insurance with accompanying pure endowment, if
any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than one hundred
and thirty percent (130%) of the rates of mortality according to the applicable table. Provided, further, that
for insurance issued on a substandard basis, the calculation of any adjusted premiums and present values
may be based on such other table of mortality as may be specified by the company and approved by the
commissioner.
Section 5a. Calculation of Adjusted Premiums - Ordinary Policies
This section shall not apply to ordinary policies issued on or after the operative date of Section 5c. In the case of ordinary
policies issued on or after the operative date of this section, all adjusted premiums and present values referred to in this Act
shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest
specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits provided that such rate of
interest shall not exceed three and one-half percent (3 1/2%) per annum except that a rate of interest not exceeding four
percent (4%) per annum may be used for policies issued on or after [insert effective date of 1972 NAIC amendments to the
Standard Nonforfeiture Law for Life Insurance] and prior to [insert effective date of 1976 NAIC amendments to the Standard
Nonforfeiture Law for Life Insurance] and a rate of interest not exceeding five and one-half percent (5 1/2%) per annum may
be used; for policies issued on or after [insert effective date of 1976 NAIC amendments to the Standard Nonforfeiture Law
for Life Insurance], except that for any single premium whole life or endowment insurance policy, a rate of interest not
exceeding six and one-half percent (6 1/2%) per annum may be used; and provided that for any category of ordinary
insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than
six (6) years younger than the actual age of the insured. Provided, however, that in calculating the present value of any paid-
up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality
assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table. Provided, further,
that for insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based
on such other table of mortality as may be specified by the company and approved by the commissioner.
After the effective date of this section, any company may file with the commissioner a written notice of its election to comply
with the provisions of this section after a specified date before January 1, 1966. After the filing of such notice, upon the
specified date (which shall be the operative date of this section for that company), this section shall become operative with
respect to the ordinary policies thereafter issued by the company. If a company makes no election, the operative date of this
section for the company shall be January 1, 1966.