Code of Alabama
Article 1 - General Provisions.
Section 27-15-8 - Life Insurance Policy Provisions - Loans on Policy.

(a) In case of policies issued on and after the operative date of Section 21-15-28, there shall be a provision that after the policy has a cash surrender value and while no premium is in default beyond the grace period for payment the insurer will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a specified rate of interest not exceeding eight percent per annum, payable in advance, an amount equal to or, at the option of the party entitled thereto, less than the loan value of the policy. The loan value of the policy shall be at least equal to the cash surrender value at the end of the then current policy year, provided that the insurer may deduct, either from such loan value or from the proceeds of the loan, any existing indebtedness not already deducted in determining such cash surrender value including any interest then accrued but not due, any unpaid balance of the premium for the current policy year and interest on the loan to the end of the current policy year. The policy may also provide that if interest on any indebtedness is not paid when due it shall then be added to the existing indebtedness and shall bear interest at the same rate and that, if and when the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value thereof, then the policy shall terminate and become void, but not until at least 30 days' notice shall have been mailed by the insurer to the last known address of the insured or policyowner and of any assignee of record at the home office of the insurer. The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application therefor. The policy, at the insurer's option, may provide for automatic premium loan, subject to an election of the party entitled to elect.
(b) This section shall not apply to term policies nor to term insurance benefits provided by rider or supplemental policy provision.

Structure Code of Alabama

Code of Alabama

Title 27 - Insurance.

Chapter 15 - Life Insurance and Annuity Contracts.

Article 1 - General Provisions.

Section 27-15-1 - Applicability of Article.

Section 27-15-2 - Life Insurance Policy Provisions - Generally.

Section 27-15-3 - Life Insurance Policy Provisions - Grace Period.

Section 27-15-4 - Life Insurance Policy Provisions - Incontestability.

Section 27-15-5 - Life Insurance Policy Provisions - Entire Contract; Representations.

Section 27-15-6 - Life Insurance Policy Provisions - Misstatement of Age or Sex.

Section 27-15-7 - Life Insurance Policy Provisions - Dividends.

Section 27-15-8 - Life Insurance Policy Provisions - Loans on Policy.

Section 27-15-8.1 - Life Insurance Policy Provisions - Maximum Rates of Interest on Policy Loans.

Section 27-15-9 - Life Insurance Policy Provisions - Table of Values and Benefits.

Section 27-15-10 - Life Insurance Policy Provisions - Table of Installments.

Section 27-15-11 - Life Insurance Policy Provisions - Reinstatement.

Section 27-15-12 - Life Insurance Policy Provisions - Payment of Premiums; Increases.

Section 27-15-13 - Life Insurance Policy Provisions - Settlement of Claims.

Section 27-15-14 - Life Insurance Policy Provisions - Title.

Section 27-15-15 - Effect of Incontestability Clause.

Section 27-15-16 - Annuity and Pure Endowment Contract Provisions - Generally.

Section 27-15-17 - Annuity and Pure Endowment Contract Provisions - Grace Period.

Section 27-15-18 - Annuity and Pure Endowment Contract Provisions - Incontestability.

Section 27-15-19 - Annuity and Pure Endowment Contract Provisions - Entire Contract.

Section 27-15-20 - Annuity and Pure Endowment Contract Provisions - Misstatement of Age or Sex.

Section 27-15-21 - Annuity and Pure Endowment Contract Provisions - Dividends.

Section 27-15-22 - Annuity and Pure Endowment Contract Provisions - Reinstatement.

Section 27-15-23 - Standard Provisions in Contracts for Reversionary Annuities.

Section 27-15-24 - Exclusions and Restrictions in Life Insurance Policies.

Section 27-15-25 - Contestability of Reinstated Policies.

Section 27-15-26 - Power of Life Insurer to Hold Proceeds of Policy.

Section 27-15-27 - Deductions in Determining Amount Due Under Life Insurance.

Section 27-15-28 - Standard Nonforfeiture Law for Life Insurance.

Section 27-15-28.1 - Standard Nonforfeiture Law for Individual Deferred Annuities - Annuity Contracts Issued by Election Under This Section Until June 30, 2006.

Section 27-15-28.2 - Standard Nonforfeiture Law for Individual Deferred Annuities - Annuity Contracts Issued After June 30, 2006, or by Election Under This Section Until June 30, 2006.

Section 27-15-29 - Prohibited Policy Plans.