(a) Interest on any indebtedness that is 90 or more days past due shall be added to the existing indebtedness and shall bear interest at the rate applicable to the existing indebtedness; and
(b) Except as provided in ORS 743.187, if the total indebtedness on the policy, including interest due or accrued, equals or exceeds the amount of the loan value of the policy, the policy shall terminate and become void upon 30 days’ notice by the insurer mailed to the last-known address of the insured or other policy owner and of any assignee of record at the home office of the insurer.
(2) The policy shall reserve to the insurer the right to defer the granting of a loan, other than for the payment of any premium to the insurer, for six months after application therefor.
(3) The policy, at the insurer’s option, may provide for automatic premium loan.
(4) This section does not apply to term insurance policies or term insurance benefits provided by rider or supplemental policy provisions, or to industrial life insurance policies. [1967 c.359 §384; 1975 c.575 §1; 1981 c.412 §18; 2001 c.318 §12]