\_\_ M29-l, Part II

Advance Manual Change No. 3-88 March 4, 1988

[Chapter 3]{.underline} - [Lapse]{.underline}

A. [Change]{.underline}: M29-l, Part 11, Chapter 3. This advance manual
change outlines **the** new procedures for accepting applications for
reinstatement. The comparative health reinstatement period is being
restored to six months. Also, VA Form 29-353a, Application For
Reinstatement (Nonmedical), will be used to reinstate when the insurance
has been lapsed for more than six months but less than one year,
regardless of the age of the insured.

B. [Procedure:]{.underline} l. Page 3-5, delete subparagraph 3.O7c(l) in
its entirety

and substitute the following:

\(l\) VA Form 29-352, Application For Reinstatement (Medical). This form
is used when insurance has been lapsed for more than one year. VA Form
29-352a, Supplemental to Medical Application, will also be enclosed if a
payment is required.

2\. Page 3-5, delete subparagraph 3.O7c(3) in its entirety and
substitute the following:

\(3\) VA Form 29-353a, Application For Reinstatement (Nonmedical). This
form is used when the insurance has been lapsed for more than 6 months
**but** less than one year.

3\. Page 3-6, paragraph 3.O7e. Change the number \"6\" to number
\~\~l2\~\~.

4\. Page 3-6, subparagraph 3.O8a(5). Delete the last sentence,
\"OTHERWISE, A PHYSICAL EXAMINATION BILL BE REQUIRED.\"

**•** 2.

M29-l, Part II

Advance Manual Change No. 3-88 March 4, 1988

C. New or Revised

[Insurance Forms]{.underline}: VA Form 29-352 and VA Form 29-353a
(Changes being developed).

PAUL KOONS

Assitant Director for Insurance

[Distribution]{.underline}:

335/29 92\
310/290 51\
310/291 l\
310/292 142\
310/295 67

310/LIBRARY l

CO/3llD 2

TOTAL 356

29OA/O57 RC:slc

April 27,1972 M29-1, Part II\
Change 6

CONTENTS

CHAPTER 3. LAPSE

PARAGRAPH PAGE\
3.01 Processing by the System 3-I\
3.02 Clerical Preparation and Release of VA Form 29-389a, Notice of Past
Due Payment 3-1\
3.03 Review for Lapse Action 3-2\
3.04 Use of Administrator\'s Decision No. 902 (Adm. Dec. 902) Credits to
Prevent Lapse 3-2\
3.05 Use of Dividends to Prevent Lapse 3-3\
3.06 Use of Pure Insurance Risk (PIR) Credits to Prevent Lapse **3-4\
**3.07 Lapse Action and Furnishing Reinstatement Requirements 3.5\
3.08 Preparation of VA Form 29-389, Notice of Lapse 3-6\
3.09 Remittance Received After Notice of Lapse Released 3-7\
3.10 Final Lapse Action-Term Insurance 3-7\
3.11 Eligibility Period to Reinstate Lapsed Term Policies 3-8\
3.12 Request for Discontinuance of Term Insurance 3-8\
3.13 Extended Term Insurance 3.9\
3.14 Final Lapse Action-Permanent Plans 3-9\
3.15 Preparation of VA Form 29-389c, Notice of Extended Term Insurance
3-11

3-j

April 27,1972 M29-1, Part II\
Change 6

CHAPTER 3. LAPSE

3.01 PROCESSING BY THE SYSTEM

a\. The processing in the lapse function is on a biweekly cycle (Monday
and Wednesday). The system is programmed to select accounts for release
of VA Form 29-389a, Notice of Past Due Payment, 43 days after the next
premium due date. The callup code is 501. \[If the policy on which
premiums are due has sufficient dividend accumulation under the credit
option to pay the missing premiums, the VA Form 29-389a will not be
released The callup code for selecting accounts for release of VA Form
29-389, Notice of Lapse, is 502, and the callup date is the next premium
due date plus 65 days. It is at this time that premiums are withdrawn
from dividend credits to prevent lapse. The callup code for final lapse
action is 503, and the \[callup date is the next premium due date plus
195 days.

b\. Unless a condition is encountered which prevents the system from
taking action or program logic indicates that clerical action is
required, the system will release VA Form 29-389a regardless of the
number of policies for an insured. Provided the insured has no more than
two policies, the system will release VA Form 29-389 and take j final
lapse action. Where the insured has more than two policies and one
lapses, (502 callup) the system will not release VA Form 29-389. lt.
will take final lapse action provided the callup code (503) and date for
final lapse action has been clerically inserted in the master record.

c\. When the system is unable to take lapse action, a VA Form 29-5886a,
Record Print Out, (RPO), with a reason code in the 500 series is
generated. The definition of reason codes in MP-6, part II, supplement
No. 1.4 indicates the reason action was not taken.

d\. On temporary records, one lapse notice, VA Form 29-389e, Notice of
Past Due Payment, is released 48 days after the next premium due date.

3.02 CLERICAL PREPARATION AND RELEASE OF VA FORM 29-389a, NOTICE OF PAST
DUE PAYMENT

a\. When an RPO indicates that a payment is due and has not been paid 43
days after the next month due, examine the RPO to determine if a VA Form
29-389a should be prepared and released. The form will not be prepared
under the following conditions:

\(I\) There is a life or policy freeze.

\(2\) There is of record a timely authorization for deductions of
premiums from benefit payments or active or retired service pay.

\(3\) An application for reinstatement or contract change is pending.

**(4)** An application for a loan is pending.

\(5\) The account is subject to an administrative adjustment.

\(6\) Less than 7 days remain between the current date and the final
date for accepting a payment as timely. A dictated lapse letter will be
released unless there are dividends available to prevent lapse.

\(7\) There are dividend credits to pay the premium due.

\(8\) An XC diary is on the account.

3-1

M29-1, Part II April 27, 1972

Change 6

b\. In preparing VA Form 29-389a\', the date to be entered in the column
headed Final Date will be the last day for accepting a payment as timely
as shown on VA Form 29-1699a, Table of Final Dates Premiums May Be
Tendered, or Accepted as Timely. Provided Insured Is Alive. When the
mode of premium payment is monthly, the following paragraph will be
added:

THE AMOUNT DUE SHOWN ABOVE IS I MONTHLY PREMIUM. HOWEVER, THE PREMIUM
FOR THE CURRENT MONTH IS ALSO DUE. YOU SHOULD, IF POSSIBLE, SUBMIT AT
LEAST 2 MONTHLY PREMIUMS TO KEEP YOUR ACCOUNT CURRENT.

When VA Form 29-389a is released clerically, prepare VA Form 29-5892a,
Policy Input, or VA Form 29-8530, Life/Miscellaneous, transaction type
082, to change the callup type to 502 and the callup date to the next
month due plus 65 days.

3.03 REVIEW FOR LAPSE ACTION

a\. In addition to RPO\'s with reason codes in the 500 series indicating
lapse, an RPO with a policy callup of 970 or 998 will be reviewed for
possible lapse action as well as for the reason for which it was
generated. When lapse action must be taken clerically, examine the RPO
to determine if credits are available which can be used to prevent
lapse. When an insured has policies other than the one on which lapse
action is being taken, also examine those accounts for available
credits. The lapse letter will not be prepared until this action has
been taken.

b\. A notice of lapse will not be prepared and released clerically if
one of the following conditions exists:

\(1\) Part of reinstatement requirements have been met and additional
information has been requested.

\(2\) There is of record a certified statement or a fully executed VA
Form 9-684, Certified Statement-Lost or Delayed Remittance, furnishing
information regarding a payment alleged to have been lost or delayed in
transit.

\(3\) Search is being made for a payment claimed to have been tendered
and information has been furnished on VA Form 29-1581, Transmittal of
Premium Payment Information, or through other means.

\(4\) An application for a loan, conversion, reduction, change of plan,
or exchange is pending.

\(5\) There is of record a timely authorization for deduction of
premiums from benefit payment or service pay.

\(6\) An XC diary is on the account.

\(7\) There are sufficient dividend credits to pay premiums, or the
dividend option is premium or credit, the premium for the 10th month has
been paid and earned, and the dividend will be sufficient to pay
premiums for the 11th and 12th month.

\(8\) The insured has inquired before the end of the 31-day grace period
disclosing a clear intent to continue insurance protection.

3.04 USE OF ADMINISTRATOR\'S DECISION NO. **902** (ADM. DEC. **902)**
CREDITS **TO PREVENT LAPSE**

a\. Administrator\'s Decision No. 902 is the authority for the use of
available credit to prevent lapse. Available credit is any amount from
any policy which is subject to refund, except unearned premiums or
premiums subject to refund because of a finding of total disability.
Credits resulting from payment of premiums, life or TDIP, and excessive
amounts tendered in payment of loan or lien indebtedness may be used to
prevent lapse of insurance and/or TDIP provided:

3-2

**April** 27, 1972 M29-1, Part II\
**Change 6**

CHAPTER 3. LAPSE

3.01 PROCESSING BY THE SYSTEM

a\. The processing in the lapse function is on a biweekly cycle (Monday
and Wednesday). The system is programmed to select accounts for release
of VA Form 29-389a, Notice of Past Due Payment, 43 days after the next
premium due date. The callup code is 501. \[If the policy on which
premiums are due has sufficient dividend accumulation under the credit
option to pay the missing premiums, the VA Form 29-389a will not be
released.\] The callup code for selecting accounts for release of VA
Form 29-389, Notice of Lapse, is 502, and the callup date is the next
premium due date plus 65 days. It is at this time that premiums are
withdrawn from dividend - credits to prevent lapse. The callup code for
final lapse action is 503, and the \[callup\] date is the next premium
due date plus 195 days.

b\. Unless a condition is encountered which prevents the system from
taking action or program logic indicates that clerical action is
required, the system will release VA Form 29-389a regardless of the
number of policies for an insured. Provided the insured has no more than
two policies, the system will release VA Form 29-389 and take final
lapse action. Where the insured has more than two policies and one
lapses, (502 callup) the system will not release VA Form 29-389. lt.
will take final lapse action provided the callup code (503) and date for
final lapse action has been cleric ally inserted in the master record.

c\. When the system is unable to take lapse action, a VA Form
29-5886\~\~ Record Print Out, (RPO), with a reason code in the 500
series is generated. The definition of reason codes MP-6-6, part II,
supplement No. **1.4** indicates the reason action was not taken.

d\. On temporary records, one lapse notice, VA Form 29-389e, Notice of
Past Due Payment, is released 48 days after the next premium due date.

3.02 CLERICAL PREPARATION AND RELEASE OF VA FORM 29-389a, NOTICE OF PAST
DUE PAYMENT

a\. When an RPO indicates that a payment is due and has not been paid 43
days after the next month due, examine the RPO to determine if a VA Form
29-389a should be prepared and released. The form will not be prepared
under the following conditions:

\(l\) There is a life or policy freeze.

\(2\) There is of record a timely authorization for deductions of
premiums from benefit payments or active or retired service pay.

\(3\) An application for reinstatement or contract change is pending.

\(4\) An application for a loan is pending.

\(5\) The account is subject to an administrative adjustment.

\(6\) Less than 7 days remain between the current date and the final
date for accepting a payment as timely. A dictated lapse letter will be
released unless there are dividends available to prevent lapse.

\(7\) There are dividend credits to pay the premium due.

\(8\) An XC diary is on the account.

3-1

M29-1, Part II April 27,1972

Change 6

b\. In preparing VA Form 29-389a\', the date to be entered in the column
headed Final Date will be the last day for accepting a payment as timely
as shown on VA Form 29-1699a, Table of Final Dates Premiums May Be
Tendered, or Accepted as Timely, Provided Insured Is Alive. When the
mode of premium payment is monthly, the following paragraph will be
added:

THE AMOUNT DUE SHOWN ABOVE IS 1 MONTHLY PREMIUM. HOWEVER, THE PREMIUM
FOR THE CURRENT MONTH IS ALSO DUE. YOU SHOULD, IF POSSIBLE, SUBMIT AT
LEAST 2 MONTHLY PREMIUMS TO KEEP YOUR ACCOUNT CURRENT.

When VA Form 29-389a is released clerically, prepare VA Form 29-5892a,
Policy Input, or VA Form 29-8530, Life/Miscellaneous, transaction type
082, to change the callup type to 502 and the callup date to the next
month due plus 65 days.

3.03 REVIEW FOR LAPSE ACTION

a\. In addition to RPO\'s with reason codes in the 500 series indicating
lapse, an RPO with a policy callup of 970 or 998 will be reviewed for
possible lapse action as well as for the reason for which it was
generated. When lapse action must be taken clerically, examine the RPO
to determine if credits are available which can be used to prevent
lapse. When an insured has policies other than the one on which lapse
action is being taken, also examine those accounts for available
credits. The lapse letter will not be prepared until this action has
been taken.

b\. A notice of lapse will not be prepared and released clerically if
one of the following conditions exists:

\(1\) Part of reinstatement requirements-have been met and additional
information has been requested.

\(2\) There is of record a certified statement or a fully executed VA
Form 9-684, Certified Statement-Lost or Delayed Remittance, furnishing
information regarding a payment alleged to have been lost or delayed in
transit.

\(3\) Search is being made for a payment claimed to have been tendered
and information has been furnished on VA Form 29-1581, Transmittal of
Premium Payment Information, or through other means.

\(4\) An application for a loan, conversion, reduction, change of plan,
or exchange is pending.

\(5\) There is of record a timely authorization for deduction of
premiums from benefit payment or service pay.

\(6\) An **XC** diary is on the account.

\(7\) There are sufficient dividend credits to pay premiums, or the
dividend option is premium or credit, the premium for the 10th month has
been paid and earned, and the dividend will be sufficient to pay
premiums for the 11th and 12th month.

\(8\) The insured has inquired before the end of the 31-day grace period
disclosing a clear intent to continue insurance protection.

3.04 USE OF ADMINISTRATOR\'S DECISION NO. 902 (ADM. DEC. 902) Credits
**TO PREVENT LAPSE**

a\. Administrator\'s Decision No. 902 is the authority for the use of
available credit to prevent lapse. Available credit is any amount from
any policy which is subject to refund, except unearned premiums or
premiums subject to refund because of a finding of total disability.
Credits resulting from payment of premiums, life or TDIP, and excessive
amounts tendered in payment of loan or lien indebtedness may be used to
prevent lapse of insurance and/or TDIP provided:

3-2

January 15,1971 M29-1, Part II

\(1\) The credit was available within 61 days from the due date of the
unpaid premium.

\(2\) The policyholder has not directed that the credit be used for
another purpose.

\(3\) The amount of credit is sufficient to pay the premium in default.
The usual 10 percent shortage rule is applicable.

b\. If sufficient credits are available, the following rules will apply
in the application of the credit.

\(l\) The date of such credit **will** be the date the amount became
available.

\(2\) If there is more than one lapsed account, the credit will be
applied to the account which lapsed first. When the lapse dates are the
same, the credit will be applied to provide-the maximum amount of
insurance.

\(3\) Where credits may be applied to prevent lapse of either insurance
or TDIP, preference will be given to keeping the life insurance in
force.

\(4\) Administrator\'s Decision No. 902 credits will be used before
effecting withdrawal of any dividend credits.

c\. If the lapsed account can be updated by use of credit from other
policies and that credit is in the overage field, prepare VA Form
29-5893a, Premium Input, or 29-8523, Premium/TDIP, transaction type 083,
for each policy from which credits are withdrawn. In addition, take the
following action:

\(I\) Prepare VA Form 29-5893a or 29-8523, transaction type 083, to up
date the account to where the credit is applied. Transaction type 087 is
also required if TDIP segment is updated. If VA Form 29-5893a is
prepared and TDIP is involved, prepare VA Form 29-5894b, TDIP Input Card
Only, transaction type 087, to update the TDIP segment.

\(2\) Advise the insured of the status off account and furnish premium
notices, if necessary.

d\. If credits were available which could have been used to prevent
lapse and the credits were erroneously refunded, establish a lien and
follow the above instructions for updating the master record and
advising the insured.

**3.05 USE** OF DIVIDENDS TO PREVENT LAPSE

a\. Dividend credits and/or accumulated interest on dividend credits may
be used to prevent lapse of any policy belonging to the insured
regardless of the fund under which the dividend was earned provided:

\(I\) There is no indication that before the premium due date there was
an expression from the policyholder that \~\~\~\~\~\~\~g\~\~ desires the
insurance.

\(2\) There is no request for other disposition of the dividend before
the due date of the unpaid premium.

\(3\) The amount of the credit is sufficient, within the 10 percent
shortage rule.

b\. Accumulated interest on dividend credit accounts will not be used
unless it is needed to complete a

premium payment because the principal balance is insufficient. Whenever
a withdrawal is made to prevent lapse and accumulated interest is needed
to complete the necessary premium payment amount, only that amount of
accumulated interest needed will be used. Whenever accumulated interest
is included in a transaction amount, the

VA Form 29A459, Dividend Deposit/Credit Statement, prepared clerically
or by the system, will show the amount of accumulated interest used in
the INTEREST block of the form. The DIVIDEND ADDED OR WITHDRAWN block
will show the total of the counts in the BALANCE BEFORE THIS ACTION and

3-3

M29-1, Part II January 15, 1971

INTEREST blocks. The entry in the block NEW BALANCE AFTER this ACTION
will be zero. (Any remaining accumulated interest will be held until the
next annual interest addition date when it will be added to the dividend
credit balance.)

c\. If the policy can be updated by use of available dividend credits
from one or more accounts, take the following action:

\(I\) Prepare VA Form 29-5894a, Optional Segment Input, or 29-8525,
Dividend/Loan/Lien, transaction type 084, to withdraw the required
amount from the dividend credit balance. **It** withdrawal is made from
more than one account, prepare a separate form to adjust the dividend
balance on each account involved.

\(2\) Prepare VA Form 29-5893a or 29-8523, transaction type 083, to
update the next month due in the premium segment. If VA Form 29-5893a is
used and TDIP is involved, prepare VA Form 29-5894b, transaction type
087, to update the next month due in the TDIP segment.

\(3\) Release VA Form 294459 or an appropriate notice.

d\. Where the existing dividend credit, plus all accumulated interest
due, is insufficient to pay the 11th premium month and the system cannot
take the necessary action, it will generate an RPO reason code 573 if
the premium for the 10th month has been paid at lapse callup time. The
following clerical action will be taken upon receipt of the RPO:

\(I\) Determine the following:

\(a\) Current year dividend amount payable, plus dividend credit balance
and total accumulated interest, minus

\(b\) Monthly premiums. (The amount of the dividend must be sufficient
to pay the 11th and 12th month \_\_\_ premiums.) The amount remaining
will be the new dividend credit balance to be entered in the master
record.

\(2\) Prepare VA Form 29-394, Dividend Transaction Input, or 29-8528,
Paid Dividend/Dividend History, transaction type 616. Debit account for
the current dividend year (45 or 49) and credit 39 for the amount of the
current year dividend payable.

\(3\) Prepare VA Form 29-5893a or 29-8523, transaction type 083. Debit
39 and credit 32 for amount applied to premiums.

\(4\) Prepare VA Form 29-5894a or 29-8525, transaction type 084. Debit
39 and credit II for the amount of entry made in the Dividend Credit
Balance field minus the dividend credit balance shown on the RPO. Debit
40 for the amount of the accumulated interest and credit 39.

\(5\) Prepare two VA Forms 294459 to reflect the actions.

e\. Dividends under the premium option will also be clerically
authorized when not authorized by the system **and** applied to pay
premiums, provided the premium for the 10th month of the policy year has
been paid and the dividend is sufficient to pay premiums for both the
11th and 12th months.

**3.06 USE OF PURE** INSURANCE RISK (PIR) CREDITS TO PREVENT **LAPSE**

**a.** When an RPO is received showing a Section 724 waiver in force on
**a** permanent plan of insurance **on date** of lapse, prepare VA Form
29-320, Request for Calculation, and send it to the Actuarial computers
to obtain calculation of PIR credits. The computation will be made from
the month and year of the last PIR refund to the date of lapse. After
computation is received, apply the entire amount of PIR credit at
present value **to update** the master record, inserting any balance in
the premium credit or shortage field.

34

January 15,1971 M29-1, Part II

\(1\) Prepare VA Form 29-5892a, Policy input, or 29-8522, Policy,
transaction type 082, to update the month number of the PIR refund.

\(2\) Prepare VA Form 29-5893a or 29\~523, transaction type 083, to
update the premium segment. If VA Form 29-5893a is used and TDIP is
involved, prepare VA Form 29-5894b, transaction type 087, to update the
TDIP segment.

\(3\) The VA Form 29-320 will be stamped Ready for File, signed, dated
and filed in the insurance folder.

\(4\) The insured will be advised by dictated letter of the action taken
on the PIR credits, and the meansavailable to him/her; for withdrawal of
unearned premiums, if desired. He or she will be requested to furnish
evidence of\' separation, if this is indicated.

b\. PIR credits are used only for life insurance premiums, no control
account entries are required on VA Form 29-5893a or 29-8523 since the
PIR credit has already been credited to the premium hind. However, if
PIR credits are applied as both life and TDIP premiums and VA Form
29-5893a is used, prepared a second VA Form 29-5893a and any other
related documents to accomplish the accounting.

3.07 LAPSE ACTION AND FURNISHING REINSTATEMENT REQUIREMENTS

a\. When it is necessary to release the initial lapse letter clerically,
it may also be necessary to prepare VA Form 29-5892a or 29-8522,
transaction type 082, to change the callup code on the master record to
503 and the callup date to the date of lapse plus 195 days. When the RPO
shows a calculation of extended term insurance, the RPO will be stamped
Ready for File, signed, dated and sent for filing in the insurance
folder.

b\. VA Form 29-389 will be prepared clerically when that form is
applicable. If a terminal action will occur in \_\_\_\_\_\_ the
comparative health period, a dictated letter will be required. A letter
by the MTST (Magnetic Tape Selectric Typewriter) may be sent in lieu of
a dictated letter when appropriate.

c\. Where reinstatement requirements are being furnished by MTST, VA
Form 9-389b, or dictated letter and a health statement or other medical
evidence is required, the appropriate application for reinstatement as
indicated below will be enclosed:

\(1\) VA Form 29-352, Application for Reinstatement (Medical). This form
is used when insurance has been lapsed more than 6 months and the
present insurance age of the policyholder is 51 or more or when the
insurance has been lapsed more than one year regardless of age. VA Form
29-352a, Supplemental to Medical Application, will also be enclosed if a
payment is required.

\(2\) VA Form 29-353, Application for Reinstatement (Non-Medical). This
form is used when the insurance has been lapsed less than 6 months and
comparative health requirements must be met.

\(3\) VA Form 29-353a, Application for Reinstatement (Non-Medical). This
form is used when the insurance has been lapsed more than 6 months but
less than a year, and the present insurance age of the policyholder is
50 or under.

d\. When a life insurance policy with an H prefix or a rider with an HD
prefix)has been lapsed less than 6 months and a dictated letter is
required, the policyholder will be reminded that he/she should take
advantage of the comparative health period. He be advised that after 6
months, any condition of health that was waived when the insurance
and/or rider was reinstated or issued under the H or HD prefix, may not
again be waived. Where the policy has been lapsed 6 months or more and
evidence of health is required for reinstatement, the medical consultant
will determine whether the policyholder can meet good health
requirements prior to release of a dictated lapse letter.

3-5

M29-1, Part II January 15, 1971

an RH, JR or JS policy has been lapsed 6 months or more and evidence of
health is required for reinstatement, the medical consultant will
determine whether the policyholder can meet good health requirements
before reinstatement requirements are furnished. If either of the
conditions listed below exists, the policyholder will be advised that it
is doubtful that h\~\~ can meet reinstatement requirements.

\(I\) The folder indicates a disability, illness, or injury occurring
after the insurance was granted which would prevent the policyholder
from meeting good health requirements, and/or

\(2\) The insurance has been lapsed for 12 months or more and the
disabilities existing at the time the insurance was granted are such
that would prevent the policyholder from meeting good health
requirements.

\`j

f\. Here an indebtedness existed and final lapse action has been taken
at the time reinstatement requirements are being furnished, information
on reinstating or repaying the indebtedness will be furnished.

**3.08 PREPARATION OF VA** FORM 29-389, NO-CE OF LAPSE

**a.** VA Form 29-389 may be clerically prepared or computer-generated.
When clerically prepared, the paragraphs required will be similar to
those listed below which are computer-generated:

\(1\) THIS NOTICE APPLIES TO YOUR TOTAL DISABILITY INCOME PROVISION
ONLY.

\(2\) YOU **CAN** REINSTATE YOUR PROTECTION NOW BY COMPLETING THE
APPLICATION ON THE BACK OF THIS FORM AND RETURNING IT AT ONCE WITH A
PAYMENT FOR THE TOTAL AMOUNT DUE.

\(3\) IF YOU SUBMIT YOUR APPLICATION AFTER ([See note
below)]{.underline}, ADD TO THE TOTAL AMOUNT DUE 1 ADDITIONAL MONTHLY
PREMIUM OF
\$\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-- FOR
EACH MONTH OF DELAY. w

NOTE: The date to be inserted will be the premium due date following the
month reinstatement requirements are quoted, minus 1 day.

\(4\) IF YOU DELAY REINSTATING MORE THAN 6 MONTHS FROM THE DATE OF
LAPSE, INTEREST WILL BE CHARGED ON ALL PREMIUMS FROM THE ORIGINAL DUE
DATE.

\(5\) IF YOU REINSTATE ON OR BEFORE ([See note below)]{.underline},
EVIDENCE THAT YOUR HEALTH IS AS GOOD ON THE DATE OF APPLICATION AS IT
WAS AT THE END OF THE GRACE PERIOD IS ACCEPTABLE. OTHERWISE, A PHYSICAL
EXAMINATION WILL BE REQUIRED.

NOTE: The date to be inserted will be 7 months minus 1 day for the date
of lapse.

\(6\) YOU **CAN** REINSTATE YOUR PROTECTION NOW BY RETURNING THIS FORM
AT ONCE WITH A PAYMENT FOR THE TOTAL AMOUNT DUE. YOU DO NOT HAVE TO
COMPLETE THE APPLICATION.

\(7\) UNLESS YOU MEET REINSTATEMENT REQUIREMENTS ON OR BEFORE ([See note
below)]{.underline}, YOU WILL HAVE LOST ALL RIGHTS TO REINSTATE THIS
INSURANCE.

NOTE: The date to be entered will be as follows: Endowment plans other
than J, JR, and JS: The last day of the endowment period. J, JR and JS
policies: The last day of the endowment period or 5 years minus 1 day
from date of lapse, whichever is earlier. Term policies: The date of
lapse, plus 5 years, minus 1 day.

\(8\) IF YOU DESIRE CONTINUED INSURANCE PROTECTION BEYOND (5-wee note
below , THIS POLICY MUST BE REINSTATED AND CONVERTED TO A PERMANENT PLAN
TYPE OF INSURANCE BEFORE THE EXPIRATION OF THIS TERM PERIOD. WE WILL BE
GLAD TO ANSWER ANY QUESTIONS YOU MAY HAVE CONCERNING CONVERSION.

3-6

May 12, 1980 M29-I, Part II

Change 16

NOTE: The date to be entered will be the last day of the term period.

\(9\) THE TOTAL AMOUNT DUE INCLUDES **1** MONTHLY PREMIUM FOR THE OLD
TERM PERIOD AND l INCREASED MONTHLY PREMIUM FOR THE NEW TERM PERIOD.

b\. The above (computer-generated\] paragraphs are selected as indicated
below:

**(i) TDIP** lapsed and how paid code on life is zero or 2-paragraphs
(l), (2), (3), (4) and (5).

\(2\) Permanent plan with TDIP or permanent plan with less than 5 years
extended term insurance-paragraphs (2), (3), (4),

\(5\) and (7) on endowment plans and policies in the J series.

\(3\) Permanent plan without TDIP with 5 or more years of extended
insurance as of the 7th due date of unpaid premium-paragraphs (3),
**(4), (6)** and (7) on endowment plans and policies in the J series.

\(4\) Term policy lapsed for less than 5 years-paragraphs (5), (7) and
(9).

\(5\) (Deleted.)

\(6\) W term policy lapsed in the final term period except when lapse
occurs in the final 6 months-paragraphs (2), (5) and **(8).**

**3.09** REMITTANCE RECEIVED AFTER NOTICE OF LAPSE RELEASED

**a.** When **a** timely premium payment is received after release of a
lapse letter, the insured will be advised that the notice of lapse was
in error. Whenever the system automatically posts a timely payment or
pending transaction to pay a premium previously shown as the month of
lapse, it will release VA Form 29-5885, Information About Your
Insurance, with the following message:

WE RECENTLY TOLD YOU THAT YOUR INSURANCE LAPSED. PLEASE DISREGARD THE
NOTICE OF LAPSE. YOUR ACCOUNT IS NOW PAID AS SHOWN ON THIS STATEMENT.
TIMELY PAYMENTS SENT LATER THAN THE PAYMENT DATE SHOWN WILL BE APPLIED
TO PAY FUTURE PREMIUMS.

If regular file maintenance action is required to post the timely
payment(s), VA Form 29-476, Notice of Premium Account Status, with a
similar message will be prepared and released to the insured.

b\. When a premium payment is not timely, it will be made pending and
the callup date of the pending posting will be advanced to the same
callup as the 5XX callup date. An RPO, reason code 209, will be
generated. Clerical action is required to acknowledge receipt of the
payment and furnish the additional reinstatement requirements.

c\. When a remittance is tendered more than 6 months after the date of
lapse, reinstatement requirements will be furnished.

**3.10 FINAL LAPSE** ACTION-TERM INSURANCE

a\. The system will take final lapse action on a term policy on policy
callup 503 if all conditions are met. These actions involve:

\(l\) How **Paid Code.** The how paid code is changed to l to indicate
the insurance is not in force.

• (2) Action **Type and** Date. The action type is changed to 5 for
record purge, and the action date to the policy anniversary date
following date of lapse plus **1** month, or **1** month after the date
final lapse action is taken, whichever is later, on participating
policies and to the date of the 503 callup on nonparticipating policies.

3-7

**M29-1, Part** II May 12, 1980

Change 16

\(3\) **Credits. Refund** credits of \$1 or more, shown in the overage
field. Dividend credits are refunded if the balance is \$1 or more. If
the balance is less than \$1, the amount is transferred to the overage
field.

**(4) Dividends on Participating Policy.** Authorize any dividend due as
a 626 pending transaction, inserting the number of months for which a
dividend is not due in the master record.

b\. If it is necessary to take final lapse action clerically in lieu of
system processing, the following input documents are required.

\(I\) How **Paid Code.** Use VA Form 29-5893a or 29-8523, transaction
type 083, to change the how paid code to I. These forms are also used to
delete existing overages or shortages.

\(2\) Action Type **and Date. VA** Form 29-5892a, 29-8522, or 29-8530,
transaction type 072, will be prepared to change the action type and
date. The input will be sorted for a second-day release. The action type
will be changed to 5 for record purge, and the action date to the policy
anniversary date following the date of lapse plus 1 month, or l month
after the date final lapse action is taken, whichever is later, on
participating policies and to the date of the 503 callup on
nonparticipating policies.

\(3\) Dividends **on Participating Policies.** Prepare input to insert
transaction type 626 for any dividend due.

c\. Premium overages will be included in any refund due the insured and
premium shortages are deductible from any refund due. If the amount to
be refunded is \$1 or more, prepare VA Form 29-5895a or VA Form 29-8526,
Pending Transaction, transaction type 008, to insert the amount to be
refunded as a 609/609 refund. !f there is no refund due and the shortage
is \$5 or more, a lien will be established as provided in chapter ll.
Use VA Form 29-5893a or 29-8523 to delete the overage or shortage from
the master record.

d\. If a dividend credit exists, prepare VA Form 29-5894a or 29-8525,
transaction type 084, to delete the balance. If there are other policies
in force, prepare a second input to transfer the dividend credit to the
other policy, making any adjustment in dividend interest that may be
required because of different anniversary dates. If the insured has no
other active policies, the credit will be refunded if it is \$1 or more,
or if combined with any other overage, exceeds \$1.

e\. If a lien on a lapsed account has not been liquidated after all
dividends have been authorized, it will be transferred to the Finance
\[activity\] provided there are no other active policies. Transfer of
liens are accomplished by the system at 3-month intervals.

3.11 ELIGIBILITY PERIOD TO REINSTATE LAPSED TERM POLICIES

\[ j A lapsed term policy may be reinstated within 5 years from the date
of lapse.

31.2 REQUEST FOR DISCONTINUANCE OF TERM INSURANCE

When an insured indicates he or she does not want to continue the term
insurance, \[ \] the following action will \[ j be taken:

a\. If there are no credits of any type on any of the insurer\'s
policies, prepare VA Form 29-5892a or 29-8530, transaction type 082, to
change the callup code to 503. The callup date will be 195 days after
the next month due. \[ j

b\. \[On direct pay accounts, if there is a refundable dividend credit,
prepare the necessary forms to take lapse action clerically. Also,\]
prepare VA Form 4-706, Notice of Refund and Refund Worksheet, to refund
the credit if the insured \~ requested refund or if it is a single
\[policy\] case. If the insured did not request refund of dividend
credit and there are other \~ policies on a premium-paying basis,
transfer the credit to an active account. Any refund **due** will be
based on the day the

refund is processed.

3-8

M29-1, Part II

Advance Manual Change No. 1-86 January 31, 1986

[CHAPTER 3. LAPSE]{.underline}

A. [Change]{.underline}: M29-1, Part II, Chapter 3. This advance manual
change is issued as a result of an administrative decision to
discontinue soliciting the cash surrender of paid-up additions on
discontinued term insurance.

3\. [Procedure:]{.underline} Delete the last sentence in subparagraph
3.I2d page 3-9\
which reads: \"In addition, the disposition of the paid-up\
addition will be requested.\"

C. New or Revised:\
[Insurance Forms:]{.underline} None

P L F. KOONS

Assistant Director for Insurance

[DISTRIBUTION]{.underline}:

335/29 92\
310/290 51\
310/291 111\
310/Library 1\
C0/311D 1

May 12, 1980 M29-1, Part II\
Change 16

c\. On deduction type accounts, take immediate action to have the
deduction decreased or discontinued, refund all credits and authorize
any unpaid dividends. Change the how paid code to 1, the action type to
5 and insert the appropriate diary in the master record.

d\. If there are paid-up additions on the terminated account, the master
record will not be purged. Input will be prepared to change the how paid
code to 1 and the action type to 5.

**3.13 EXTENDED TERM INSURANCE**

a\. A policy in the J series has extended term insurance value after it
has been on a premium-paying basis for **1** year. Ml other permanent
plans have extended term insurance values after being on a
premium-paying basis for 3 months or longer.

b\. The net reserve (the reserve plus dividends on deposit minus certain
indebtednesses) is used to purchase extended term insurance for the face
amount of the policy, less indebtedness, from the due date of the first
premium In default. In addition, there is an administrative charge
against the reserve on policies in the J series. The charge is \$2 per
\$ **1** ,000 insurance on all plans except plan 9. On plan 9, the
charge is \$2 per \$500 insurance.

c\. The reserve may not be used to purchase extended term insurance
beyond the mortality table on which premiums were based or beyond the
endowment period of an endowment plan. The pure endowment on an
endowment plan may not exceed the face amount of the policy, less
indebtedness. **if** there is excessive reserve, the amount not required
will be retained as a dividend deposit balance and the insured advised
that it is refundable upon request. In addition, the how paid code on
the insurance master record will be changed to paid-up 2.

d\. interest on loan and interest bearing liens deductible from policy
reserves is due up to the date of lapse. Payments \~ tendered after
lapse are not acceptable as payment of loan, interest or lien, or lien
interest if the reserve is sufficient to pay \~ the indebtedness.

e\. When calculations are necessary to compute extended term insurance,
leap years will be considered as regular years.

**3.14** FINAL LAPSE ACTION-PERMANENT PLANS

a\. When it is determined that final lapse action must be taken
clerically, examine the RPO and insurance folder to determine if
indebtedness exists which is deductible from policy reserve and if
computation of extended term insurance was made in connection with
release of lapse notice. If not, obtain the computation.

b\. Prepare VA Form 29-389c-l, Notice of Extended Term Insurance, and
the necessary input documents to update the master record and take
accounting action. A VA Form 29-5897a, Accounting Control Input Card, or
29-8527, Accounting Control, transaction type 0\~9, may be required to
accomplish the balance of accounting actions.

c\. There should be a policy freeze which should be lifted when all
actions have been completed. The following segments may be involved:

\(l\) Policy Segment

\(a\) Prepare VA Form 29-5892a or 29-8522, transaction type 022, to
insert the amount of extended term insurance and dividend months not
paid.

\(b\) When no pure endowment is payable, prepare VA Form 29-5892a or
29-8530, Life Miscellaneous, transaction type 072 (2d-day release), to
insert the action type, action date and the date of expiration of term
insurance. The action type should be 5 on nonparticipating policies and
9 on participating policies.

\(c\) When pure endowment on a participating policy is involved, prepare
VA Form 29-394, Dividend Transaction input Card, transaction type 626,
to establish a pending transaction for payment of dividends on pure
endowment. The insurance

3-9

M29-1, Part II May 12, 1980

Change 16

**amount shown in the pending transaction should be** the amount of pure
endowment payable **at the** end of the endowment period. The **dividend
year should he the same as** the dividend year for payment of dividends
on the extended term insurance. **The year of expiration of the extended
term insurance** will be entered in lieu of the insurance effective day.
The action type

**should be 26 if notice of maturing endowment has not** been released
and the action date should be 2 months before maturity **date. After
release of notice of maturing endowment,** the action type should be 6
and the action date should be the **date the pure endowment becomes
payable, the day** following the last day in the endowment period. If it
**is necessary to change the action type, prepare VA Form 29-5892a or
29-8530, transaction** type 072 (2d-day release).

\(2\) **Premium Segment. Prepare** VA Form 29-5893a, or 29-8523,
transaction type 053, **to** change the how paid **code, delete an
overage of \$1 or more, and Insert the date of lapse.** When pure
endowment is payable, this form is **also used to insert the amount of
pure endowment.**

\(3\) Loan Segment. if a loan payment tendered after lapse is being
reversed or interest is being added or reversed, prepare VA Form
29-5894a or 29-8525, transaction type 085, to accomplish the transaction
and delete the loan from the master record.

\(4\) Lien Segment

\(a\) When a premium or overpayment lien exists which can be deducted
from the reserve, prepare VA Form 29-5894a or 19-8525, transaction type
086, to add interest to the date of lapse and update the interest year.
The same transaction type is used if interest is to be reversed.

\(b\) When there is an off-tape lien which can be deducted from the
reserve, prepare VA Form 29-1610, Transfer Worksheet, to process the
off-tape lien accounting. Send VA Form 29-1610 to the Finance (activity.

\(c\) **Recovery** of **accelerated dividend overpayment** indebtedness
will not be made from the reserve **available** to purchase \~
**extended insurance. A lien will be established** for the amount of the
overpayment. To obtain the amount of **overpayment, \~ determine the
dividend due for the number of months** in the dividend year the policy
was **on a premium-paying basis and number of months the policy was on
extended** term insurance. Subtract the total of these two **amounts
from** the **dividend** paid. To insert **a** lien **on the master
record, prepare** VA Form 29-5894a or 29-8525, transaction type **006.**
The **policyholder will be informed of the reason for the lien, and
regular** collection procedures will be followed.

\(5\) Dividend Segment. Prepare VA Form 29-5894a or 29-8525, transaction
type 084, to delete a dividend deposit account or a dividend credit
balance.

\(6\) Pending Transaction

**\[ j When there are pending transactions to be** refunded, prepare VA
Form 29-5895a **or** 29-8526, transaction type **088, to cause
disbursement for each amount to be refunded.**

3-10

January 15,1971 M29-1, Part II

3.15 PREPARATION OF VA FORM 29-389c, NO-CE OF Extended TERM INSURANCE

a\. VA Form 29 -3 89c **will be clerically** prepared or
computer-generated. Information listed below will be printed in the
spaces provided:

**(i)** File number.

\(2\) Policy number.

\(3\) Date of lapse (month, day and year).

\(4\) Amount of extended term insurance.

\(5\) Date extended insurance expires (month, day and year).

\(6\) Reserve on date of lapse.

\(7\) Dividends on deposit.

\(8\) Indebtedness.

\(9\) Cash value.

b\. The paragraphs in the form **will** be selected from those printed
below:

\(I\) IT WILL NOT BE NECESSARY TO SUBMIT EVIDENCE OF GOOD Health.

Use the above paragraph under one of the following conditions:

\(a\) Insurance protection ceases on the last day of the endowment
period, or

\(b\) The date of lapse plus 5 years minus l day on a policy in the J
series is earlier than the expiration date of extended term insurance
minus 5 years.

\(2\) YOUR NET CASH VALUE ON THE DATE OF LAPSE WAS GREATER THAN THE
AMOUNT REQUIRED TO PURCHASE EXTENDED INSURANCE TO THE END OF THE
ENDOWMENT PERIOD. THE BALANCE WAS USED TO PURCHASE \$\_\_\_\_\_\_\_\_ OF
PURE ENDOWMENT INSURANCE, WHICH WILL BE PAYABLE TO YOU THE DAY AFTER
EXTENDED INSURANCE PROTECTION ENDS.

Use the-above paragraph on endowment plans with pure endowment.

\(3\) IT WILL ALSO BE NECESSARY FOR YOU TO SUBMIT EVIDENCE OF GOOD
HEALTH.

Use the above paragraph on all plans with 5 or less years of extended
term insurance as of the callup date for final lapse action except where
insurance is extended to the end of the endowment period.

**(4)** IT WILL NOT BE NECESSARY FOR YOU TO SUBMIT EVIDENCE OF GOOD
HEALTH IF YOU REINSTATE ON OR BEFORE ([See note below)]{.underline}.
AFTER THAT DATE EVIDENCE OF GOOD HEALTH WILL BE REQUIRED.

Use the above paragraph where there are more than 5 years of extended
term insurance, and

\(a\) Endowment plans. Protection ceases prior to the last day of the
endowment period

3-11

M29-1 Part II fl January 15, 1971

\(b\) Policies in the J series. The expiration date of extended term
insurance minus 5 years is earlier than the date of lapse plus 5 years
minus 1 day.

NOTE: The date to be entered in the space will be the expiration date of
ex tended term insurance minus 5 years.

\(5\) PROTECTION UNDER THE TOTAL DISABILITY INCOME PROVISION ATTACHED TO
YOUR POLICY CEASED 31 DAYS AFTER DATE OF LAPSE. TO REINSTATE IT EVIDENCE
OF GOOD HEALTH AND PREMIUMS IN ARREARS PLUS INTEREST ARE REQUIRED.

Use the above paragraph where TDIP lapsed at the same time the insurance
lapsed.

\(6\) THE AMOUNT OF EXTENDED TERM INSURANCE WILL BE REDUCED BY ONE-HALF
AT THE END OF THE DAY PRECEDING YOUR 65Th BIRTHDAY.

Use the above paragraph when extended term insurance on a modified life
will terminate on or after the insured\'s 65th birthday.

\(7\) THIS POLICY CANNOT BE REINSTATED AFTER ([See note
below)]{.underline}.

Use this paragraph if the policy is one in the J series.

NOTE: The date to be entered in the space is the date of lapse plus S
years minus 1 day or the last day of endowment period, whichever is
earlier.

c\. When entries are made in the Plus Dividend and/or Less Indebtedness
columns, an appropriate explanation with a breakdown of the amounts
involved will be shown.

d\. When the form is completed and released, a copy will be stamped
Ready for File, signed, dated and sent for filing in the folder.

342

M29-1, Part II

\~ Advance Manual Change No. 3-83 March 25, 1983

[CHAPTER 3]{.underline} - [LAPSE]{.underline}

A. [Change:]{.underline} M29-1, Part II, Chapter 3. This Advance Manual
Change is issued in\
conjunction with Advance Manual Change 5-83 in M29-l, Part I, and\
provides detailed instructions for proportioning loan amounts when\
placing on extended insurance a policy with paid-up additions and\
multiple loan segments.

B. [Procedure:]{.underline}

1\. Page 3-i, add the following as the last entry in the table of
contents:

3.16 Proportioning Loan Amounts When Placing\
On Extended Insurance 3-13.

2\. Page 3-9, delete subparagraph 3-13e in its entirety and insert the
following:

e\. If a policy with paid-up additions and outstanding indebtedness is
placed on extended insurance, the total loan indebtedness at the date of
lapse must be divided proportionally between the paid-up additions and
the basic policy, so

a that the portion associated with the basic policy can be deducted from
the basic policy reserve. (See paragraph 3.16, \"Proportioning Loan
Amounts When Placing on Extended Insurance.\")

f\. When calculations are necessary to compute extended term insurance,
leap years will be considered as regular years.

3\. Insert the attached pages, numbered 3-13, 3-114 and 3-15, at the end
of Chapter 3.

C. New or Revised

[Insurance Forms]{.underline}: None

BERT W. CAREY

Assistant Director for Insurance

[DISTRIBUTION]{.underline}:

335/29 8O\
310/290 50\
310/291 200\
310/Library 1\
21414C 10

a 3\' 16 PROPORTIONING LOAN AMOUNTS WHEN PLACING ON EXTENDED INSURANCE

a\. Outstanding loan indebtedness, including accumulated interest to the
date of lapse, lust be deducted fro. the policy reserve before the
policy can be placed on extended insurance. If the policy has paid-up
additions, however, a portion of the total indebtedness should be left
against the paid-up additions. The amount of indebtedness to be
recovered fro. the basic policy reserve bears the sue ratio to the total
indebtedness as does the basic policy reserve to the total reserve value
of the basic policy and the paid-up additions combined. If the policy
has lore than one outstanding loan, the loan(s) bearing the highest
interest rate(s) should be liquidated such that the indebtedness
remaining on the paid-up additions bears the lowest interest rate(s).

b\. [Example:]{.underline} To calculate extended insurance on a policy
with paid-up

additions and more than one outstanding loan.

Facts:

Ordinary Life Policy (V Prefix) Age at issue: 40

Effective Date February 28, 1943\
Date of Lapse (N.M.D.) September 28, 1982\
Amount of Policy \$7,000\
Paid-up Additions \$1,933\
Loan Anniversary Date November 14, 1981\
4 Percent Loan (11-14-81) \$2,055.76\
5 Percent Loan (11-14-81) \$2,746\~67\
Accumulated Interest on 5% Loan \$6.45

Computation of Proportioned Loan Amounts:

( 1) Number of days between 636\
date of lapse and day number\
loan anniversary date day number 31 days

( 2) Total indebtedness at date of lapse\
4 percent 1.03485 x \$2,055.76 : \$£\`,127.40\
5 percent 1.04356 x \$2,746.67 + \$6.45 : [+\$2,872.76]{.underline}\
\$5,000.16

( 3) Duration of policy at date of lapse\
date 1982, 9 mos.\
effective date [1943, 2 mos.]{.underline}\
39 yrs. 7 mos.

( 4) Reserve on basic Ordinary Life (OL) on date of lapse\
(M29-2, Part 111A) \$751.18 x 7 : \$5,258.26

( 5) Attained age of insured at date of lapse\
Age at issue + duration of policy (Step 3)\
40 yrs. + 39 yrs. 7 mos. 79 yrs. 7 mos.

3-13

•1

( 6) Reserve on paid-up additions (PUA) on date of lapse \$1,533.45

(\$1,933 x .79330, from ?129-2, Part II, Table XVI - A)

( 7) Total reserve on date of lapse\
\$5,258.26 (Step 4) + \$1,533.45 (Step 6) \$6,791.71

( 8) Proportioned basic policy indebtedness:\
[OL reserve (Step 4)]{.underline}\
Total reserve (Step 7) x Total indebtedness (Step 2)\
(\$5,258.26/\$6,79I.7I) x \$5,000.16 \$3,871.21

\$3,871.21 from the basic policy reserve must be applied to reduce the
loan indebtedness.

( 9) Liquidating loan with highest interest rate:\
Ordinary Life indebtedness (Step 8)\
5 percent loan with accumulated interest (from Step 2) - 2 872.76\
Remainder to be applied to the 4 percent indebtedness

To obtain the amount of interest paid on the 5 percent loan, subtract
the 5 percent indebtedness on the last anniversary date from the 5
percent indebtedness at date of lapse (\$2,872.76 - \$2,746.67 :
\$126.09).

\(10\) Proportioning remaining indebtedness:\
Original 4 percent loan at last anniversary date \$2,055.76\
4 percent loan repayment (Step 9) [\$ 998.45]{.underline}\
Indebtedness on PUA (4 percent) \$1,057.31

If the remaining proportioned basic policy indebtedness is greater than
the 4 percent loan principle, the difference should be applied to the 4
percent interest.

\(11\) Accumulated interest on portion of 4 percent loan paid from OL:

Portion of 4 percent loan paid from OL (Step 9) times \$ 998.45\
4 percent interest factor [x .03485]{.underline}\
Accumulated interest on 4 percent loan repayment \$ 34.80

Computation of Extended Insurance:

\(12\) Net cash value:\
Reserve on basic policy (Step 4) minus \$5,258.26\
Proportioned Ordinary Life indebtedness (Step 8)
[-\$3,871.21]{.underline}\
\$1,387.05

\(13\) Amount of extended insurance:\
Face value of Ordinary Life minus \$7,000.00\
Proportioned Ordinary Life indebtedness (Step 8)
[-\$3,871.21]{.underline}

\$3,128.79 : \$3,129

3-14

\(14\) Net reserve per \$1,000 to purchase extended\
w insurance:\
\$1,387.05 (Step 12)/3.12879 (from Step 13) \$ \~!I3.32

\(15\) Net single premium for 3 yrs. extended insurance \$ 370.88

Daily difference between 3 yrs. and \~ yrs.

(cost per day) .2722

(?(29-2, Part II, Table X1)

\(16\) Number of day extension beyond 9-27-85\
(\$443.32 - \$370.88)/.2722 266

\(17\) September 27, 1985 day number [+270]{.underline}

\(18\) Last date of extended insurance coverage\
June 20, 1986 day number 536

3-15