Theodore R. McKeldin, Governor                      29

endowment contracts shall not, to that extent, be incorporated there-
in.

(b)  A provision that there shall be a grace period of either SO
days or one month within which the payment of any premium after
the first may be made, during which grace period the contract shall
continue in full force but if a claim arises under the contract during
such grace period before the overdue premiums or the deferred pre-
miums of the current contract 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 premiums may be deducted from any amount
payable under the contract in settlement.

(c)  If any statements, other than those relating to age, sex, and
identity, are required as a condition to issuing such an annuity or
pure endowment contract, and subject to Subsection (e) of this sec-
tion, there shall be a provision that the contract shall be incontestable
after it has been in force during the lifetime of the person or of each
of the persons as to whom such statements are required, for a period
of two years from its date of issue, except for nonpayment of pre-
miums, and at the option of the insurer, except for any provisions
relating to benefits in the event of total and permanent disability as
defined in the contract, and provisions which grant additional insur-
ance specifically against death by accident or accidental means.

(d)  A provision that the contract shall constitute the entire con-
tract between the parties, or, if a copy of the application is endorsed
upon or attached to the contract when issued, a provision that the
contract and the application therefor shall constitute the entire con-
tract between the parties. If the application is so made a part of the
contract, the contract 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.

(e)  A provision that if the age or sex of the person or persons
upon whose life or lives the contract is made, or of any of them, and
whose age or ages are considered in determining either the premiums,
or the amount of benefit, has been misstated, the amount payable or
benefit accruing under the contract shall be such as the premium or
premiums would have purchased at the correct age or sex; and that if
the insurer shall make or has made any overpayment or overpay-
ments on account of any such misstatement, the amount thereof, with
interest at a specified rate not exceeding six per cent, per annum, com-
pounded annually, may be charged against the current, or next suc-
ceeding payment or payments to be made by the insurer under the
contract.

(f)  If a participating contract, there shall be a provision that the
insurer shall annually ascertain and apportion any divisible surplus
accruing under the contract and that dividends arising from such
apportionment shall be credited annually beginning not later than
the third contract year; but any dividend arising from such appor-
tionment shall not be made contingent upon the payment of any
further premium except that if dividends are allowed on an anni-
versary of the policy prior to the third, such dividends may be made
subject to the payment of the succeeding year's premium. The con-
tract shall provide that the owner shall have the right to have the
dividend arising from such participation paid in cash, or applied to