210Non‑forfeiture of policies in certain cases of non‑payment of premiums

#### 210 Non‑forfeiture of policies in certain cases of non‑payment of premiums (1) A life company must not forfeit a policy only because of the non‑payment of a premium (the overdue premium) if: (a) at least 3 years’ premiums have been paid on the policy; and (b) the surrender value of the policy exceeds the total of: (i) the amount of the overdue premium; and (ii) the total of any other amounts owed to the company under, or secured by, the policy. (2) For the purposes of paragraph (1)(b), the surrender value of the policy is to be worked out as at the day immediately before the day on which the overdue premium falls due. (3) Until the overdue premium is paid, the company may charge interest on it on terms not less favourable to the policy owner than such terms (if any) as are prescribed by the regulations. (4) The overdue premium and any unpaid interest charged on it are taken, for the purposes of this Act, to be a debt owing to the company under the policy. (5) A life company must not forfeit a policy because of the non‑payment of a premium unless: (a) the company has given the policy owner a written notice: (i) setting out the amount of the premium and the day on which it became, or will become, due; and (ii) stating that the policy will be forfeited at the end of 28 days after the giving of the notice or 28 days after the day on which the premium became, or will become, due, whichever is the later if the amount due to the company has not been paid; and (b) at least 28 days have elapsed since: (i) the day on which the notice was given; or (ii) the day on which the premium became due; whichever is the later. Increases in sum insured etc. at request of policy owner (6) Subsections (7) to (9) apply if an ordinary policy is varied at the request of the policy owner by increasing: (a) both the amount of the sum insured and the amount of each premium; or (b) if additional amounts of premium are paid—the amount of the sum insured. (7) Subject to subsections (8) and (9), subsections (1) to (4) apply as follows: (a) the ordinary policy is taken not to have been varied as mentioned in subsection (6); (b) a separate policy (the additional policy) is taken to have been effected on the date of the variation, in accordance with the following: (i) the sum insured under the additional policy is the amount of the increase in the sum insured; (ii) the period for which premiums have been paid under the additional policy starts on the date of the variation; (c) any additional amounts of premium paid as mentioned in paragraph (6)(b) are taken to have been paid under the additional policy; (d) to the extent that a premium that is paid or payable under the ordinary policy (as varied) on or after the date of the variation exceeds what would have been the amount payable apart from the variation, the premium is taken to have been paid or payable under the additional policy. (8) If, in relation to a premium under the ordinary policy (as varied), subsection (1) (as affected by subsection (7)): (a) provides that the life company must not forfeit the ordinary policy only because of the non‑payment of some or all of the premium; but (b) does not provide that the life company must not forfeit the additional policy only because of the non‑payment of the premium (or a part of the premium that, because of paragraph (7)(d), is taken to be payable under the additional policy); then: (c) subsection (1) does not prevent the life company from forfeiting the ordinary policy (as varied) to the extent of the variation, because of non‑payment of the premium; and (d) subsection (5) applies in relation to such a forfeiture as if the reference in that subsection to forfeiting the policy were a reference to forfeiting the policy to the extent of the variation. > Note: The effect of subsection (7) and paragraph (8)(c) is that subsection (1) might protect the original benefits under the policy from forfeiture even if the increase, represented by the additional policy, is liable to forfeiture. (9) Despite subsection (4): (a) an overdue premium, that, under subsection (7), is taken to be a premium under the additional policy; and (b) any unpaid interest charged on the overdue premium; are taken, for the purposes of a provision of this Act other than this section, to be a debt owing under the ordinary policy (as varied).