§ 4008. Policy loan
Oklahoma Statutes AnnotatedTitle 36. Insurance
36 Okl.St.Ann. § 4008
§ 4008. Policy loan
A. There shall be a provision that after three (3) full years' premiums have been paid, the insurer, at any time while the policy is in force, will loan on the execution of a proper note or loan agreement by the owner of the policy, and on proper assignment of the policy and on the sole security thereof, at a specified rate of interest, not in excess of six percent (6%) per annum, on policies issued prior to January 1, 1976, a sum equal to or, at the option of the owner of the policy, less than the cash value of the policy at the end of the current policy year and of any dividend additions thereto. A policy issued on or after such date and prior to July 1, 1982, shall contain either, but not both, of the following policy loan interest rate provisions:
2. A provision that all loans under the policy shall bear interest at a variable rate, not in excess of eight percent (8%) per annum, specified from time to time by the insurer. The effective date of any increase in such variable rate shall not be less than one (1) year after the effective date of the previous rate.
b. notify the policyholder with respect to premium loans of the initial rate of interest on the loan as soon as it is reasonably practical to do so after making the initial loan. Notice need not be given to the policyholder when a further premium loan is added, except as provided in subparagraph c below,
7. The loan value of the policy shall be determined in accordance with Section 4029 of this title, but no policy shall terminate in a policy year as the sole result of a change in the interest rate during that policy year, and the life insurer shall maintain coverage during that policy year until the time at which the policy would otherwise have terminated if there had been no change during that policy year;
D. The company may deduct from such loan value any existing indebtedness on or secured by the policy not already deducted in determining such cash value including interest due or accrued, and any unpaid balance of the premium for the current policy year, and any interest which may be allowable on the loan to the end of the current policy year; provided, that the policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six (6) months after the application therefor is made. The policy may also provide that if interest on any indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value thereof, then the policy shall terminate and become void, but not until at least thirty (30) days' notice shall have been mailed by the insurer to the last-known address of the insured or policy owner and of any assignee of record at the home office of the insurer.
The policy, at the insurer's option, may provide for an automatic premium loan, subject to an election of the party entitled to elect. No condition other than as herein provided shall be exacted as a prerequisite to any such loan. This provision shall not be required in term insurance, nor shall it apply to temporary insurance or pure endowment insurance, issued or granted in exchange for lapsed or surrendered policies.
Credits
Laws 1957, p. 372, § 4008, operative July 1, 1957; Laws 1975, c. 219, § 1, operative Jan. 1, 1976; Laws 1982, c. 139, § 1, eff. July 1, 1982.
36 Okl. St. Ann. § 4008, OK ST T. 36 § 4008
Current with emergency effective legislation through Chapter 295 of the Second Regular Session of the 59th Legislature (2024). Some sections may be more current, see credits for details.
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