Standard Nonforfeiture Law

The Standard Nonforfeiture Law regulates life insurance policies and annuity contracts, and its central requirement is that a policyholder who defaults on premiums — or an annuity holder who stops paying considerations — keeps a minimum guaranteed benefit rather than forfeiting what has already been paid in, generally as a cash surrender value or a paid-up benefit. Around that core it governs the contracts themselves: policy and contract forms must be approved by the state insurance regulator, certain terms are mandated or prohibited, and further provisions address policy loans and the interest chargeable on them, replacement of existing coverage, required notices to insureds, and the treatment of proceeds as between beneficiaries, trustees, and the insured's creditors. It also prohibits discriminatory underwriting and coverage practices and requires licensing for those selling related products such as burial contracts and life settlements.

Editorial summary generated from the text of this act. It is not part of the statute — read the sections below for the operative language.