Section 15. Schedule Premium Policy.
The definition of a "scheduled premium policy" was added by the 1983 amendments to the Model Regulation.
- It is intended and to establish the perimeters of contemporary "traditional" variable life insurance policies.
Specifically, a variable life insurance policy is classified as a "scheduled premium" policy if the insurer has established (or "fixed") both:
- the amount of required premium payments and the times at which they are to be paid.
- Typically, under a scheduled premium policy, if a premium is not paid in accordance with the "schedule'' which has been "fixed" by the insurer, and if the non-payment of premium is not remedied within the applicable grace period, the policy lapses, triggering the operation of non-forfeiture options.
It should be noted that a policy would not necessarily be classified as a "scheduled premium" policy simply because the
specifications page might set forth a "planned premium" (a concept characteristic of current universal life insurance
- This is because the planned premium, in most cases, is set by the insured, not the insurer.
1983-2, NAIC Proceedings