Theodore R. McKeldin, Governor                      25

deferred premium of the current policy year, if any, are paid, the
amount of such premiums together with interest, not in excess of six
per cent, per annum on any overdue premium may be deducted from
any amount payable under the policy in settlement.

(d)  A provision that the policy shall be incontestable after it has
been in force during the lifetime of the insured for a period of two
years from its date of issue, except for non-payment of premiums,
and at the option of the insurer, except for provisions relating to
benefits in the event of total and permanent disability, as defined in
the policy, and provisions which grant additional insurance specific-
ally against death by accident or accidental means.

(e)  A provision that the policy shall constitute the entire contract
between the parties or if a copy of the application is endorsed upon
or attached to the policy when issued, a provision that the policy
and the application therefor shall constitute the entire contract be-
tween the parties. If the application is so made a part of the con-
tract, the policy shall also provide that all statements made by the
applicant, in such application, shall, in the absence of fraud, be
deemed representations and not warranties.

(f)  A provision that if the age of the person insured or the age
of any other person whose age is considered in determining the
premium has been misstated, any amount payable or benefit accruing
under the policy shall be such as the premium would have purchased
at the correct age or ages.

(g)  In all policies which provide for participation in the insurer's
surplus, a provision that the insurer shall annually ascertain and
apportion any divisible surplus accruing under the policy and that
dividends arising from such apportionment shall be credited annually
beginning not later than the third policy year; but any dividend
arising from such apportionment shall not be made contingent upon
the payment of any further premiums except that if dividends are
allowed on an anniversary of the policy prior to the third, such divi-
dends may be made subject to the payment of the succeeding year's
premium. The owner of the policy shall have the right to have the
dividend arising from such participation paid in cash, or applied to
the payment of premium, or to the purchase of paid-up additions to
the policy or permitted to accumulate to the credit of the policy at
such rate of interest as shall be allowed by the insurer and such other
dividend options as may be provided by the policy, as the policyholder
may elect; provided, however, that in the case of a term policy, the
owner of such policy shall have^ the right to have the dividend arising
from such participation paid in cash, or applied to the payment of
premium, or, at the option of the insurer permitted to accumulate to
the credit of the policy at such rate of interest as shall be allowed by
the insured and such other dividend options as may be provided by
the policy, as the policyholder may elect. The policy shall further
provide which of the options shall be effective if the insured shall
fail to notify the insurer in writing of his election within the period
of grace allowed for the payment of the premium. If a participating
policy provides that the benefit under any paid-up non-forfeiture
provision is to be participating, it may provide that any divisible
surplus apportioned while the insurance is in force under such non-
forfeiture provisions shall be applied in the manner set forth in the