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§ 16-305. Cash surrender value after premium due on policy anniversary in default

West's Annotated Code of MarylandInsurance

West's Annotated Code of Maryland
Insurance (Refs & Annos)
Title 16. Life Insurance and Annuities
Subtitle 3. Maryland Standard Nonforfeiture Law for Life Insurance (Refs & Annos)
MD Code, Insurance, § 16-305
§ 16-305. Cash surrender value after premium due on policy anniversary in default
Currentness
In general
(a) On default of a premium payment due on a policy anniversary, any cash surrender value available under the policy, regardless of whether the cash surrender value is required under § 16-303 of this subtitle, shall be at least:
(1) the present value of the future guaranteed benefits, calculated as of that policy anniversary, that would have been provided under the policy, including any existing paid-up additions; less
(2) the sum of:
(i) the present value of adjusted premiums, calculated as of that policy anniversary in accordance with the applicable provisions of §§ 16-307 through 16-309 of this subtitle, corresponding to premiums that would have fallen due on or after the anniversary; and
(ii) the amount of any indebtedness to the insurer on the policy.
Policies providing supplemental life insurance or annuity benefits at option of insured for identifiable additional premium
(b)(1) This subsection applies only to a policy that:
(i) by rider or supplemental policy provision, provides supplemental life insurance or annuity benefits at the option of the insured for an identifiable additional premium; and
(ii) is issued on or after the operative date of § 16-309 of this subtitle.
(2) On a policy subject to this subsection, the cash surrender value referred to in subsection (a) of this section shall be at least the sum of:
(i) the cash surrender value for an otherwise similar policy issued at the same age without the rider or supplemental policy provision; and
(ii) the cash surrender value calculated under subsection (a) of this section for a policy that provides only the benefits otherwise provided by the rider or supplemental policy provision.
Family policies that define primary insured and provides term insurance on life of spouse
(c)(1) This subsection applies only to a family policy that:
(i) defines a primary insured and provides term insurance on the life of the spouse of the primary insured that expires before the spouse's age 71; and
(ii) is issued on or after the operative date of § 16-309 of this subtitle.
(2) On a policy subject to this subsection, the cash surrender value referred to in subsection (a) of this section shall be at least the sum of:
(i) the cash surrender value calculated under subsection (a) of this section for an otherwise similar policy issued at the same age without term insurance on the life of the spouse; and
(ii) the cash surrender value calculated under subsection (a) of this section for a policy that provides only the benefits otherwise provided by term insurance on the life of the spouse.
Policies paid-up by completion of premium payments or continued under paid-up nonforfeiture benefits
(d)(1) This subsection applies to a policy of life insurance that is paid-up by completion of all premium payments or is continued under any paid-up nonforfeiture benefit, regardless of whether the cash surrender value is required under § 16-303 of this subtitle.
(2) On a policy subject to this subsection, the cash surrender value available within 30 days after a policy anniversary shall be at least the present value, calculated as of the policy anniversary, of the future guaranteed benefits, including any existing paid-up additions, reduced by any indebtedness to the insurer on the policy.

Credits

Added by Acts 1996, c. 11, § 1, eff. Oct. 1, 1997.
Formerly Art. 48A, § 414.
MD Code, Insurance, § 16-305, MD INSURANCE § 16-305
Current through legislation effective through April 9, 2023, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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