215 ILCS 5/229.1
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 5/ - Illinois Insurance Code.|Article XIV - Legal Reserve Life Insurance

 (from Ch. 73, par. 841.1)Sec. 229.1.         Non-forfeiture benefits and cash surrender values in policies issued prior  to the operative date of section 229.2.(1) This subsection shall apply only to policies of life insurance  (other than Industrial life insurance) issued prior to the operative date  of section 229.2 (the Standard Non-forfeiture Law.)The non-forfeiture benefit referred to in clause (g) of section 224  shall be available to the insured in event of default in premium payments,  after premiums shall have been paid for three years, and shall be a  stipulated form of insurance, effective from the due date of the defaulted  premium, the net value of which shall not be less than the reserve at the  date of default on the policy and on dividend additions thereto, if any,  exclusive of the reserve on account of total and permanent disability and  additional accidental death benefits (the policy to specify the mortality  table, rate of interest and method of valuation adopted for computing such  reserve), less a specified maximum percentage (not more than two and  one-half) of the amount insured by the policy and of existing dividend  additions thereto, if any, and less any existing indebtedness to the  company on or secured by the policy, the exact percentage to be specified  for each year for which required values are not included in the policy; if  more than one option is provided, the policy to specify which of such  options shall apply in the event of the insured's failure to notify the  company of his selection of an option. The policy shall provide that it may  be surrendered to the company at its home office within the period of grace  after the due date of the defaulted premium for a specified cash value not  less than the above prescribed minimum value of the stipulated form of  insurance; and any policy may also provide that the company may defer  payment for not more than six months after the application therefor is  made. Provided that any policy may also contain a provision that in event  of default in a premium payment before such options become available the  reserve on any dividend additions then in force may at the option of the  company be paid in cash or applied as a net premium to the purchase of  paid-up term insurance for any amount not in excess of the face of the  original policy. This subsection shall not apply to term insurance of  twenty years or less, but such term policy shall specify the mortality  table, rate of interest and method of valuation adopted for computing  reserves.(2) This subsection shall apply only to policies of Industrial life  insurance issued prior to the operative date of section 229.2 (the Standard  Non-forfeiture Law).The non-forfeiture benefit referred to in clause (f) of section 229,  shall be available in event of default in premium payments after premiums  shall have been paid for five full years, and shall be a stipulated form of  insurance effective from the due date of the defaulted premium, the net  value of which shall not be less than the reserve on the policy at the end  of the last completed quarter of the policy year for which premiums have  been paid, and all dividend additions thereto, if any, exclusive of any  reserve on total and permanent disability and additional accidental death  benefits, (the policy to specify the mortality table, rate of interest and  method of valuation adopted for computing such reserve), less a maximum  percentage (not more than two and one-half per centum) of the amount  insured by the policy and of existing dividend additions thereto, if any,  and less any existing indebtedness to the company on or secured by the  policy. The policy shall also specify said percentage, or other rule of  calculation so as to permit determination of the values, to be specified  for each year for which required values are not included in the policy. The  cash surrender value referred to in clause (h) of section 229, shall be  available upon surrender of the policy to the company at its home office  within the period of grace after the due date of the defaulted premium and  shall be not less than the above prescribed minimum value of the stipulated  form of insurance; provided that the company may defer payment for not more  than six months after the application therefor is made. This subsection  shall not apply to term insurance of twenty years or less but such term  policy shall specify the mortality table, rate of interest and method of  valuation adopted for computing reserves.    (Source: Laws 1943, Vol. 1, p. 824.)