North Dakota Century Code Title 26.1. Insurance § 26.1-33-05. Provisions required in life policy

No life insurance policy may be issued or delivered in this state, unless the policy contains:

1. A provision that all premiums are payable in advance either at the home office of the company, or to an agent of the company, upon delivery of a receipt signed by one or more of the officers who are named in the policy.

2. A provision that the policyholder is entitled to a thirty-one-day grace period for the payment of every premium after the first, which may be subject to an interest charge, during which grace period the insurance continues in force.  The provision may contain a stipulation that if the insured dies during the grace period, the overdue premium will be deducted in any settlement under the policy.

3. A provision that the policy constitutes the entire contract between the parties and is incontestable after it has been in force during the lifetime of the insured for two years from its date, except for nonpayment of premiums and except for violations of the policy relating to naval or military service in time of war, and, at the option of the company, provisions relative to benefits in the event of total and permanent disability and provisions that grant additional insurance specifically against death by accident also may be excepted.

4. A provision that all statements made by the insured, in the absence of fraud, are representations and not warranties, and that no such statement avoids the policy unless it is contained in a written application and a copy of the application is endorsed upon or attached to the policy when issued.

5. A provision that if the age of the insured has been understated, the amount payable under the policy is such as the premium would have purchased at the correct age.

6. A provision that the policy participates in the surplus of the company and that, beginning not later than the end of the third policy year, the company annually will determine and account for the portion of the divisible surplus accruing on the policy, and that the owner of the policy has the right each year to have the current dividend arising from such participation paid in cash;  and if the policy provides other dividend options, it must provide further which one of the four standard options is effective if the owner of the policy does not elect any of the other options.  The four standard options are payment in cash, application toward payment of any premiums, application to the purchase of paid-up additions to the policy, or accumulation to the credit of the policy with interest at the rate provided for in the policy and payable at the maturity of the policy or at the anniversary of the policy.  This provision, however, is not required in nonparticipating policies.

7. A provision that after the policy has been in force three years, the company at any time while the policy is in force, will advance on proper assignment of the policy and on the sole security thereof, at a specified rate of interest, a sum equal to, or at the option of the owner of the policy, less than, the reserve at the end of the current policy year on the policy and on any dividend additions thereto, computed according to a mortality table, interest rate, and method of valuation permitted by chapter 26.1-35, less a sum not more than two and one-half percent of the amount insured by the policy and of any dividend additions thereto;  and that the company will deduct from the loan value any existing indebtedness on the policy and any unpaid balance of the premium for the current policy year, and may collect interest in advance on the loan to the end of the current policy year.  The provision may provide further that the loan may be deferred for not exceeding six months after the application for the loan is made.  It must be stipulated further in the policy that failure to repay any advance or to pay interest thereon does not void the policy unless the total indebtedness thereon to the company equals or exceeds the loan value at the time of the failure nor until one month after notice has been mailed by the company to the last-known address of the insured and of the assignee, if any.  No other condition may be exacted as a prerequisite to any such advance.  This provision is not required in a policy of term insurance.

8. A provision that if, in event of default in premium payments, the value of the policy is applied to the purchase of other insurance, and if the insurance is in force and the original policy has not been surrendered to the company and canceled, the policy may be reinstated within three years from the default upon evidence of insurability satisfactory to the company and payment of arrears of premiums with interest.

9. A provision that when a policy becomes a claim by the death of the insured, settlement must be made upon receipt of due proof of death, or not later than two months after receipt of the proof, and must include reasonable interest accrued from the date of death so long as a proof of death is filed within one hundred eighty days after the date of the death.

10. A table showing the amounts of installments in which the policy may provide its proceeds may be payable.

11. A title on the face and on the back of the policy correctly describing the policy.

12. A statement whether any conditions or restrictions of liability by reason of travel, occupation, change of residence, or suicide are provided.  These restrictions, except in the case of armed forces or military service in time of war, may only be effective during the first year after the issuance of the policy for suicide and for two years after the issuance of the policy in all other instances.

13. A provision that in the event of the death of an insured, the insurer will refund within thirty days after notice to the insurer of the insured's death the portion of the premium, fee, or other sum paid beyond the month of death.  This provision does not apply to term life insurance, flexible premium life insurance, or to any policy when the insurer has a valid defense to the payment of benefits under the policy.

Any of the foregoing provisions or portions thereof, relating to premiums not applicable to single premium policies, may not be incorporated to the extent to which they are inapplicable in a single premium policy.


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