Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) If premiums under a policy have been paid in respect of a period of at least 3 years, the owner of the policy may request the life company concerned:
(a) to vary the policy so that no further premiums are payable; and
(b) to treat the policy as a paid - up policy.
(2) A request under subsection (1) must be in writing.
(3) On receiving the request, the life company must vary the policy by reducing the amount payable under the policy to an amount calculated in accordance with the prudential standards.
(4) The policy, as varied, is to be taken to be a paid - up policy.
(5) If, when a request is made under subsection (1):
(a) the policy owner owes a debt to the life company under the policy; or
(b) a debt owed by the policy owner to the life company is secured by the policy;
the company may either:
(c) treat the debt as a debt secured by the paid - up policy; or
(d) in calculating the reduced amount payable under the policy, take the debt into account in accordance with the prudential standards.
(6) If a debt is taken into account in accordance with paragraph (5)(d), the debt is discharged.