Ala. Code § 27-15-75 (1975) Calculation of Adjusted Premiums

• Library: Alabama Statutes
• Edition: 2023
• Currency: Current with legislation from the 2023 Regular and Special Sessions.
• Year: 2023
• Citation: Ala. Code § 27-15-75 (1975)

(a)

(1) This section shall not apply to policies issued on or after the operative date of Section 27-15-78, as defined therein. Except as provided in subsection (c), the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of:

a. The then present value of the future guaranteed benefits provided for by the policy.

b. Two percent of the amount of the insurance if the insurance be uniform in amount, or of the equivalent uniform amount, as defined in this article, if the amount of insurance varies with the duration of the policy.

c. Forty percent of the adjusted premium for the first policy year.

d. Twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less.

(2) Provided, however, that in applying the percentages specified in paragraphs c. and d. of subdivision (1), no adjusted premiums shall be deemed to exceed four percent of the amount of insurance or level amount equivalent. The date of issue of a policy for the purpose of this section shall be the date as of which the rated age of the insured is determined.

(b) In the case of a policy providing an amount of insurance varying with the duration of the policy, the equivalent level amount for the purpose of this section shall be deemed to be the level amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the inception of the insurance as the benefits under the policy.

(c) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to: