Group Life Insurance

V.S.A. tit. 8, ch. 103, subch. 5

in effect

8 V.S.A. § 3801 Scope of subchapter—Short title

3801. Scope of subchapter—Short title This subchapter applies only to group life insurance and may be known and cited as the “Group Life Insurance Law.” Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 1).

8 V.S.A. § 3802 Group contracts must meet group requirements

3802. Group contracts must meet group requirements (a) No life insurance policy shall be delivered or issued for delivery in this State insuring the lives of more than one individual unless to one of the groups as provided for in sections 3803-3810a of this title, and unless in compliance with the other applicable provisions of this subchapter. (b) Subsection (a) of this section shall not apply to life insurance policies: (1) insuring only individuals related by blood, civil marriage, or legal adoption; (2) insuring only individuals having a common interest through ownership of a business enterprise, or a substantial legal interest or equity therein, and who are actively engaged in the management thereof; or (3) insuring only individuals otherwise having an insurable interest in each other’s lives. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 2); amended 1993, No. 55, § 11, eff. June 3, 1993; 2009, No. 3, § 12a, eff. Sept. 1, 2009.

8 V.S.A. § 3803 Employee groups

3803. Employee groups The lives of a group of individuals may be insured under a policy issued to an employer, or to the trustees of a fund established by an employer, which employer or trustees shall be deemed the policyholder, to insure employees of the employer for the benefit of persons other than the employer, subject to the following requirements: (1) The employees eligible for insurance under the policy shall be all of the employees of the employer, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the employees of one or more subsidiary corporations, and the employees, individual proprietors, and partners of one or more affiliated corporations, proprietors, or partnerships if the business of the employer and of such affiliated corporations, proprietors, or partnerships is under common control through stock ownership, contract, or otherwise. The policy may provide that the term “employees” shall include the individual proprietor or partners if the employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation, by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he or she is actively engaged in and devotes a substantial part of his or her time to the conduct of the business of the proprietor or partnership. A policy issued to insure the employees of a public body may provide that the term “employees” shall include elected or appointed officials. (2) The premium for the policy shall be paid by the policyholder, either wholly from the employer’s funds or funds contributed by him or her, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured employees. A policy on which no part of the premium is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (3) The policy must cover at least two employees at date of issue. (4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the employer or trustees. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 3); amended 2005, No. 36, § 7, eff. June 1, 2005; 2009, No. 137 (Adj. Sess.), § 5.

8 V.S.A. § 3804 Labor union groups

3804. Labor union groups The lives of a group of individuals may be insured under a policy issued to a labor union, which shall be deemed the policyholder, to insure members of such union for the benefit of persons other than the union or any of its officials, representatives, or agents, subject to the following requirements: (1) The members eligible for insurance under the policy shall be all of the members of the union, or all of any class or classes thereof determined by conditions pertaining to their employment or to membership in the union, or both. (2) The premium for the policy shall be paid by the policyholder, either wholly from the union’s funds, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance. No policy may be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance. A policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 75 percent of the then eligible members, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for the insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (3) The policy must cover at least 10 members at date of issue. (4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the union. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 4).

8 V.S.A. § 3805 Debtor groups

3805. Debtor groups The lives of a group of individuals may be insured under a policy issued to a creditor or to the trustees of a fund established by one or more creditors, which creditor or trustees shall be deemed the policyholder, to insure debtors of the creditor or creditors subject to the following requirements: (1) The debtors eligible for insurance under the policy shall be all of the debtors of the creditor or creditors or all of any class or classes thereof determined by conditions pertaining to the indebtedness or to the purchase giving rise to the indebtedness. The policy may provide that the term “debtors” shall include the debtors of one or more subsidiary corporations, and the debtors of one or more affiliated corporations, proprietors, or partnerships if the business of the policyholder and of such affiliated corporations, proprietors, or partnerships, is under common control through stock ownership, contract, or otherwise. (2) The premium for the policy shall be paid by the policyholder, either from the creditor’s or creditors’ funds, or from charges collected from the insured debtors, or from both. A policy on which part or all of the premium is to be derived from the collection from the insured debtors of identifiable charges not required of uninsured debtors shall not include, in the class or classes of debtors eligible for insurance, debtors under obligations outstanding at its date of issue without evidence of individual insurability unless at least 75 percent of the then eligible debtors elect to pay the required charges. A policy on which no part of the premium is to be derived from the collection of such identifiable charges must insure all eligible debtors, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (3) The policy may be issued only if the group of eligible debtors is then receiving new entrants at the rate of at least 100 persons yearly, or may reasonably be expected to receive at least 100 new entrants during the first policy year, and only if the policy reserves to the insurer the right to require evidence of individual insurability if less than 75 percent of the new entrants become insured. The policy may exclude from the classes eligible for insurance classes of debtors determined by age. (4) The amount of insurance on the life of any debtor shall at no time exceed the amount owed to the creditor, or creditors or $70,000.00, whichever is less, except that the amount of such insurance on the life of a debtor who has secured a debt by a mortgage on real estate shall at no time exceed $140,000.00, or the amount owed, whichever is less. Where the insurance is in connection with an educational or agricultural credit transaction commitment, the amount owed by the debtor to any creditor may be deemed to include the portion of the loan commitment that has not been advanced by the creditor. (5) The insurance shall be payable to the policyholder or creditor. Such payment shall reduce or extinguish the unpaid indebtedness of the debtor to the extent of such payment. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 5); amended 1973, No. 222 (Adj. Sess.), § 3, eff. April 3, 1974; 1989, No. 249 (Adj. Sess.), § 2, eff. June 16, 1990; 2009, No. 42, § 10.

8 V.S.A. § 3806 Licensed lenders; charges for insurance

3806. Licensed lenders; charges for insurance In the case of a debtor under section 2201 et seq. of this title, the collection of identifiable charges by the lender shall not be deemed a violation of said chapter if: (1) The identifiable charge to the debtor is consistent with the actual cost of such insurance to the lender. The identifiable charge to the debtor shall be deemed consistent with the actual cost of the insurance to the lender if the aggregate of all such identifiable charges to all debtors of the same class, determined by conditions pertaining to the debt, is not greater than the premiums charged by the insurer, as computed at the time the charge to the debtor is determined; (2) The payment of such identifiable charge is optional with the debtor; and (3) Upon discharge of the debt, whether through prepayment, renewal, or refinancing, the debtor is paid a pro rata refund of the identifiable charge paid by the debtor computed according to a schedule to be approved by the Commissioner of Financial Regulation. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 6); amended 1989, No. 225 (Adj. Sess.), § 25(b); 1995, No. 180 (Adj. Sess.), § 38(a); 2011, No. 78 (Adj. Sess.), § 2, eff. April 2, 2012.

8 V.S.A. § 3807 Public employee groups

3807. Public employee groups The lives of a group of individuals may be insured under a policy issued to the departmental head of any department or agency of the State of Vermont, its political subdivisions, or to an association of public employees formed for purposes other than obtaining insurance and having, when the policy is placed in force, a membership in the classes eligible for insurance of not less than 75 percent of the number of employees eligible for membership in such classes, which association or departmental head shall be deemed the policyholder, to insure members of such association or public employees for the benefit of persons other than the departmental head, the association or any of its officials, subject to the following requirements: (1) The persons eligible for insurance under the policy shall be all of the members of the association or employees of the department, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the association, or both. The policy may provide that the term “employee” shall include retired employees. (2) The premium for the policy shall be paid by the policyholder, either from the association’s own funds, or from charges collected from the insured members or employees specifically for the insurance, or from both, or as may otherwise be authorized by existing or future legislation. Any charges collected from the insured members or employees specifically for the insurance, and the dues of the association if they include the cost of insurance, shall be collected through deductions by the employer from salaries of the members or employees. Such deductions from salary may be paid by the employer to the association or directly to the insurer. No policy may be placed in force unless and until at least 75 percent of the then eligible members of the association or employees of the department, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, have elected to be covered and have authorized their employer to make the required deductions from salary. (3) Charges collected from the insured members or employees specifically for the insurance, and the dues of the association if they include the cost of insurance, shall be determined according to each attained age or in not less than four reasonably spaced attained age groups. In no event shall the rate of such dues or charges be level for all members or employees regardless of attained age. (4) The policy must cover at least 10 persons at the date of issue. (5) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members, employees, or by the association. (6) As used herein, “employees” means employees of the U.S. government, or of any state, or of any political subdivision or instrumentality of any of them. (7) This section does not preclude the insuring of public employees under any other applicable provision of this subchapter or law of this State. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 7).

8 V.S.A. § 3808 Trustee groups

3808. Trustee groups The lives of a group of individuals may be insured under a policy issued to the trustees of a fund established by, adopted by, or participated in by two or more employers, or by one or more labor unions, or by one or more employers and one or more labor unions, which trustees shall be deemed the policyholder, to insure employees of the employers or members of the unions for the benefit of persons other than the employers or the unions, subject to the following requirements: (1) No policy may be issued to insure employees of any employer whose eligibility to participate in the fund as an employer arises out of considerations directly related to the employer being a commercial correspondent or business client or patron of another employer, except where such other employer exercises substantial control over the business operations of the participating employers. (2) The persons eligible for insurance shall be all of the employees of the employers or all of the members of the unions, or all of any class or classes thereof determined by conditions pertaining to their employment, or to membership in the unions, or to both. The policy may provide that the term “employees” shall include retired employees, former employees, and the individual proprietor or partners if an employer is an individual proprietor or a partnership. No director of a corporate employer shall be eligible for insurance under the policy unless such person is otherwise eligible as a bona fide employee of the corporation by performing services other than the usual duties of a director. No individual proprietor or partner shall be eligible for insurance under the policy unless he or she is actively engaged in and devotes a substantial part of his or her time to the conduct of the business of the proprietor or partnership. The policy may provide that the term “employees” shall include the trustees or their employees, or both, if their duties are principally connected with such trusteeship. (3) The premium for the policy shall be paid by the trustees wholly from funds contributed by the employer or employers of the insured persons, or by the union or unions, or by both, or partly from such funds and partly from funds contributed by the insured persons. A policy on which no part of the premium is to be derived from funds contributed by the insured persons specifically for their insurance must insure all eligible persons, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (4) The policy must cover at date of issue at least 100 persons; and it must cover an average of not less than three persons per employer unit unless the policy is issued to the trustees of a fund established by employers that have assumed obligations through a collective bargaining agreement and are participating in the fund either pursuant to those obligations with regard to one or more classes of their employees that are encompassed in the collective bargaining agreement or as a method of providing insurance benefits for other classes of their employees, or unless the policy is issued to the trustees of a fund established by one or more labor unions. (5) The amount of insurance under the policy must be based upon some plan precluding individual selection either by the insured persons or by the policyholder, employers, or unions. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 8); amended 2009, No. 137 (Adj. Sess.), § 6.

8 V.S.A. § 3809 Association of employers groups

3809. Association of employers groups The lives of a group of individuals may be insured under a policy issued to an association of two or more employers, which association shall be deemed the policyholder, to insure employees of such employers for the benefits of persons other than the association or the employers, subject to the following requirements: (1) The policy may be issued only if: (A) the association has been in existence for at least five years and was formed for purposes other than obtaining the insurance; and (B) the participating employers constitute at date of issue at least fifty percent of the total employers eligible to participate, unless the total number of persons covered at date of issue exceeds 600, in which event such participating employers must constitute at least 25 percent of such total employers, in either case omitting from consideration any employer whose employees are already covered for group life insurance. (2) The persons eligible for insurance under the policy shall be all of the employees of the participating employers, or all of any class or classes thereof determined by conditions pertaining to their employment. The policy may provide that the term “employees” shall include the individual proprietor or partners whenever a participating employer is an individual proprietor or a partnership. The policy may provide that the term “employees” shall include retired employees. The policy may provide that the term “employees” shall include the employees of the association to which the policy is issued. (3) The premium for the policy shall be paid by the association, either wholly from the association’s funds or funds contributed by the employers, or partly from such funds and partly from funds contributed by the insured employees. No policy may be issued on which the entire premium payable by the policyholder is to be derived from funds contributed by the insured employees. A policy on which part of the premium so payable is to be derived from funds contributed by the insured employees may be placed in force only if at least 75 percent of the then eligible employees of each participating employer, excluding any as to whom evidence of individual insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premiums so payable is to be derived from funds contributed by the insured employees must insure all eligible employees, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (4) The policy must cover at least 100 employees at date of issue. (5) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the employees or by the policyholder or the employer. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 9).

8 V.S.A. § 3810 Credit union groups

3810. Credit union groups The lives of a group of individuals may be insured under a policy issued to a credit union or to the trustees of a fund established by one or more credit unions, which credit union or trustees shall be deemed the policyholder to insure members of such credit union or credit unions for the benefit of persons other than the credit union or credit unions or trustees or any of their officials, subject to the following requirements: (1) The members eligible for insurance shall be all of the members of the credit union or credit unions, or all of any class or classes thereof determined by conditions pertaining to membership in the credit union or credit unions. (2) The premium for the policy shall be paid by the policyholder, either wholly from the funds of the credit union or credit unions, or partly from such funds and partly from funds contributed by the insured members specifically for their insurance, or wholly from funds contributed by the insured members specifically for their insurance. A policy on which all or a part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed in force only if at least 75 percent of the then eligible members of each credit union, excluding any as to whom evidence of insurability is not satisfactory to the insurer, elect to make the required contributions. A policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members, or all except any as to whom evidence of individual insurability is not satisfactory to the insurer. (3) The policy must cover at least 25 members at date of issue. (4) The amounts of insurance under the policy must be based upon some plan precluding individual selection either by the members or by the credit union or credit unions. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 10).

8 V.S.A. § 3810a Associations and discretionary groups

3810a. Associations and discretionary groups (a) The lives of a group of individuals may be insured under a policy issued to an association, or to the trustees of a fund established or maintained for the benefit of members of an association, which association or trustees shall be deemed the policyholder, to insure members of such association for the benefit of persons other than the association, trustees, or their officials, subject to the following requirements: (1) The association shall have a minimum of 100 members at the time of incorporation or formation if it has been incorporated or formed outside this State, and a minimum of 25 members at the time of incorporation or formation if it has been incorporated or formed in this State. (2) The association shall have been organized and maintained in good faith for purposes other than that of obtaining insurance. (3) The association shall have been in active existence for at least five years. (4) The association shall have articles of association and bylaws that provide that: (A) the association holds regular meetings not less than annually to further purposes of the members; (B) the association collects dues or solicits contributions from members; and (C) the members have voting privileges and representation on the governing board and committees. (5)(A) The premium for the policy shall be paid from funds contributed by the association, or by members, or by both, or from funds contributed by the covered persons or from both the covered persons and the association members. (B) Except as provided in subdivision (C) of this subdivision (5), a policy on which no part of the premium is to be derived from funds contributed by the covered persons specifically for the insurance must insure all eligible persons, except those who reject such coverage in writing. (C) An insurer may exclude or limit the coverage on any person as to whom evidence of individual insurability is not satisfactory to the insurer. (6) The amount of insurance under the policy must be based upon some plan precluding anti-selection either by the members or the association. (b) The lives of a group of individuals may be insured under a policy issued to any other group determined in the discretion of the Commissioner to be substantially similar to those described in this chapter. (c) The lives of individuals insured under a group policy authorized by this subchapter may continue to be insured following termination of employment, membership, or other affiliation of the individual with the group under a portability group approved by the Commissioner, provided that the group policy complies with all the applicable requirements of this subchapter. Added 1993, No. 55, § 9, eff. June 3, 1993; amended 2009, No. 137 (Adj. Sess.), § 7.

8 V.S.A. § 3811 Dependents’ coverage

3811. Dependents’ coverage Any group life policy issued under section 3803 (employee groups) or 3804 (labor union groups) or 3807 (public employee groups) or 3808 (trustee groups) or 3809 (employer association groups) or 3810a (associations and discretionary groups) of this title may be extended to insure the employees or members against loss due to the death of their spouses and children, or any class or classes thereof, subject to the following requirements: (1) The premium for the insurance shall be paid by the policyholder, either from the employer’s, union’s, or association’s funds or funds contributed by them or from funds contributed by the insured employees or members, or from both. If any part of the premium is to be derived from funds contributed by the insured employees or members, the insurance with respect to spouses and children may be placed in force only if at least 75 percent of the eligible employees or members elected to make the required contribution. If no part of the premium is to be derived from funds contributed by the employees or members, all eligible employees or members, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, must be insured with respect to their spouses and children. (2) The amounts of insurance must be based upon some plan precluding individual selection either by the employees or members or by the policyholder, employer, or union, and shall not exceed the amount of insurance available to the employee or member with respect to any spouse or child. (3) Upon termination of the insurance with respect to the members of the family of any employee or member by reason of the employee’s or member’s termination of employment, termination of membership in the class or classes eligible for coverage under the policy, or death, the spouse shall be entitled to have issued by the insurer, without evidence of insurability, an individual policy of life insurance, without disability or other supplementary benefits, providing application for the individual policy shall be made, and the first premium paid to the insurer, within 31 days after such termination, subject to the requirements of subdivisions 3820(1), (2), and (3) of this title. If any group policy terminates or is amended so as to terminate the insurance of any class of employees or members and the employee or member is entitled to have issued an individual policy, under section 3821 of this title, the spouse shall also be entitled to have issued by the insurer an individual policy, subject to the conditions and limitations provided above and in section 3821 of this title. If the spouse dies within the period during that he or she would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance that he or she would have been entitled to have issued under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. (4) Notwithstanding section 3819 of this title, only one certificate need be issued for delivery to an insured person if a statement concerning any dependent’s coverage is included in such certificate. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 11); amended 1987, No. 136 (Adj. Sess.), eff. April 8, 1988; 1993, No. 55, § 12, eff. June 3, 1993; 2025, No. 142 (Adj. Sess.), § 46, eff. July 1, 2026.

8 V.S.A. § 3812 Provisions required in group contracts

3812. Provisions required in group contracts No policy of group life insurance shall be delivered in this State unless it contains in substance the provisions set forth in sections 3813 through 3822 of this title or provisions that in the opinion of the Commissioner are more favorable to the persons insured, or at least as favorable to the persons insured and more favorable to the policyholder; except, however, that: (1) Sections 3818 to 3822 inclusive shall not apply to policies issued to a creditor to insure debtors of such creditor. (2) The standard provisions required for individual life insurance policies shall not apply to group life insurance policies. (3) If the group life insurance policy is on a plan of insurance other than the term plan, it shall contain a nonforfeiture provision or provisions that in the opinion of the Commissioner is or are equitable to the insured persons and to the policyholder, but nothing herein shall be construed to require that group life insurance policies contain the same nonforfeiture provisions as are required for individual life insurance policies. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 12).

8 V.S.A. § 3813 Grace period

3813. Grace period The group life insurance policy shall contain a provision that the policyholder is entitled to a grace period of 31 days for the payment of any premium due except the first, during which grace period the death benefit coverage shall continue in force, unless the policyholder shall have given the insurer written notice of discontinuance in advance of the date of discontinuance and in accordance with the terms of the policy. The policy may provide that the policyholder shall be liable to the insurer for the payment of a pro rata premium for the time the policy was in force during such grace period. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 13).

8 V.S.A. § 3814 Incontestability

3814. Incontestability The group life insurance policy shall contain a provision that the validity of the policy shall not be contested, except for nonpayment of premium, after it has been in force for two years from its date of issue; and that no statement made by any person insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of two years during such person’s lifetime nor unless it is contained in a written instrument signed by him or her. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 14).

8 V.S.A. § 3815 Application; statements deemed representations

3815. Application; statements deemed representations The group life insurance policy shall contain a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued and become a part of the contract; that all statements made by the policyholder or by the persons insured shall be deemed representations and not warranties; and that no statement made by any person insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such person or to his or her beneficiary. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 15).

8 V.S.A. § 3816 Insurability

3816. Insurability The group life insurance policy shall contain a provision setting forth the conditions, if any, under which the insurer reserves the right to require a person eligible for insurance to furnish evidence of individual insurability satisfactory to the insurer as a condition to part or all of his or her coverage. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 16).

8 V.S.A. § 3817 Misstatement of age

3817. Misstatement of age The group life insurance policy shall contain a provision specifying an equitable adjustment of premiums or of benefits, or of both, to be made in the event the age of a person insured has been misstated, such provision to contain a clear statement of the method of adjustment to be used. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 17).

8 V.S.A. § 3818 Payment of benefits

3818. Payment of benefits The group life insurance policy shall contain a provision that any sum becoming due by reason of the death of the person insured shall be payable to the beneficiary designated by the person insured, subject to the provisions of the policy in the event there is no designated beneficiary as to all or any part of such sum living at the death of the person insured, and subject to any right reserved by the insurer in the policy and set forth in the certificate to pay at its option a part of such sum not exceeding $500.00 to any person appearing to the insurer to be equitably entitled thereto by reason of having incurred funeral or other expenses incident to the last illness or death of the person insured. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 18).

8 V.S.A. § 3819 Certificate

3819. Certificate The group life insurance policy shall contain a provision that the insurer will issue to the policyholder for delivery to each person insured an individual certificate setting forth a statement as to the insurance protection to which he or she is entitled, to whom the insurance benefits are payable, and the rights and conditions set forth in sections 3820, 3821, and 3822 of this title. 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 19).

8 V.S.A. § 3820 Conversion on termination of eligibility

3820. Conversion on termination of eligibility There shall be a provision that if the insurance, or any portion of it, on a person covered under the policy ceases because of termination of employment or of membership in the class or classes eligible for coverage under the policy, such person shall be entitled to have issued to him or her by the insurer, without evidence of insurability, an individual policy of life insurance without disability or other supplementary benefits, provided application for the individual policy shall be made, and the first premium paid to the insurer, within 31 days after such termination, and provided further that: (1) The individual policy shall, at the option of such person, be on any one of the forms, except term insurance, then customarily issued by the insurer at the age and for the amount applied for. (2) The individual policy shall be in an amount not in excess of the amount of life insurance that ceases because of such termination less the amount of any life insurance for which such person is or becomes eligible under the same or any other group policy within 31 days after such termination, provided that any amount of insurance that shall have matured on or before the date of such termination as an endowment payable to the person insured, whether in one sum or in installments or in the form of an annuity, shall not, for the purposes of this provision, be included in the amount that is considered to cease because of such termination. (3) The premium on the individual policy shall be at the insurer’s then customary rate applicable to the form and amount of the individual policy, to the class of risk to which such person then belongs, and to his or her age attained on the effective date of the individual policy. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 20).

8 V.S.A. § 3821 Conversion on termination of policy

3821. Conversion on termination of policy The group life insurance policy shall contain a provision that if the group policy terminates or is amended so as to terminate the insurance of any class of insured persons, every person insured thereunder at the date of such termination whose insurance terminates and who has been so insured for at least five years prior to such termination date shall be entitled to have issued to him or her by the insurer an individual policy of life insurance, subject to the same conditions and limitations as are provided by section 3820 of this title except that the group policy may provide that the amount of such individual policy shall not exceed the smaller of: (1) the amount of the person’s life insurance protection ceasing because of the termination or amendment of the group policy, less the amount of any life insurance for which he or she is or becomes eligible under any group policy issued or reinstated by the same or another insurer within 31 days after such termination; or (2) $2,000.00. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 21).

8 V.S.A. § 3822 Death pending conversion

3822. Death pending conversion The group life insurance policy shall contain a provision that if a person insured under the policy dies during the period within which he or she would have been entitled to have an individual policy issued to him or her in accordance with section 3820 or 3821 of this title and before such an individual policy shall have become effective, the amount of life insurance that he or she would have been entitled to have issued to him or her under such individual policy shall be payable as a claim under the group policy, whether or not application for the individual policy or the payment of the first premium therefor has been made. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 22).

8 V.S.A. § 3823 Notice as to conversion right

3823. Notice as to conversion right If any individual insured under a group life insurance policy hereafter delivered in this State becomes entitled under the terms of such policy to have an individual policy of life insurance issued to him or her without evidence of insurability, subject to making of application and payment of the first premium within the period specified in such policy, and if such individual is not given notice of the existence of such right at least 15 days prior to the expiration date of such period, then, in such event, the individual shall have an additional period within which to exercise such right, but nothing herein contained shall be construed to continue any insurance beyond the period provided in such policy. This additional period shall expire 15 days next after the individual is given such notice but in no event shall such additional period extend beyond 60 days next after the expiration date of the period provided in such policy. Written notice presented to the individual or mailed by the policyholder to the last known address of the individual or mailed by the insurer to the last known address of the individual as furnished by the policyholder shall constitute notice for the purpose of this section. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 23).

8 V.S.A. § 3824 Readjustment of premium

3824. Readjustment of premium Any group life insurance contract may provide for a readjustment of the premium rate based upon the experience thereunder. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 24).

8 V.S.A. § 3825 Application of dividends, rate reductions

3825. Application of dividends, rate reductions If a policy dividend is hereafter declared or a reduction in rate is hereafter made or continued for the first or any subsequent year of insurance under any policy of group life insurance heretofore or hereafter issued to any policyholder, the excess, if any, of the aggregate dividends or rate reductions under such policy and all other group insurance policies of the policyholder over the aggregate expenditure for insurance under such policies made from funds contributed by the policyholder, or by an employer of insured persons, or by a union or association to which the insured persons belong, including expenditures made in connection with administration of such policies, shall be applied by the policyholder for the sole benefit of insured employees or members. Added 1967, No. 344 (Adj. Sess.), § 1 (ch. 2, subch. 6, § 25).

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/08/103Fetched: 10/21/2026