(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 then eligible employees or members who then have eligible dependents, excluding any as to whose family members evidence of insurability is not satisfactory to the insurer, 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 which he or she would have been entitled to have an individual policy issued in accordance with this provision, the amount of life insurance which 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.)