(a) The policy may contain provisions under which the company will accept advance payments of premiums; but in no event may the company undertake to accept deposits which would exceed the maximum amount required to pay all future premiums which will become due under the policy, including any options contained therein. The contract may permit the insured to withdraw excess deposits in cash, but any provisions which would cause a forfeiture of principal, or exact a surrender charge are prohibited. The contract must state the interest rate used to discount the future premiums and must provide for disposition of any unused premiums on surrender of the contract or death of the insured. (b) This section is not applicable to single premium policies.
Source Note: The provisions of this §3.125 adopted to be effective January 1, 1976; amended to be effective September 20, 1982, 7 TexReg 3244.