In addition to any other investment now permitted by law, a guardian or trustee may invest the funds of his ward or of the beneficiary of the trust in life, endowment or annuity contracts of legal reserve life insurance companies duly qualified and authorized to write such business in the State of Alabama; provided, however, that the annual premium or premiums on such contracts purchased by such guardian or trustee shall not exceed 25 percent of the income of the ward or the beneficiary for any calendar year preceding the date of such purchase. The contract must contain the following options after it has been in force for three years or less: a cash surrender value option, a paid-up insurance or endowment option, and an extended insurance or endowment option. Such contract may be issued on the life or lives of the ward or wards, or beneficiary or beneficiaries of the trust or upon the life or lives of persons in whose life or lives such ward or beneficiary of the trust has an insurable interest. The proceeds or avails of such contract shall be the sole property of the person or persons whose funds are invested therein. The contract or policy form may provide reasonable forfeiture for nonpayment of premiums and must be a form of contract which has been approved by the Commissioner of Insurance of the State of Alabama. Whether such contract so specifically provides or not, the guardian or trustee shall have the right without order of court to exercise for the use of the ward or beneficiary of the trust, any option contained in such contract; except, that the guardian or trustee shall not have the right to borrow on security of said policy or its proceeds unless authorized to do so by order of the court having jurisdiction of the guardianship or trust.
The power given in this section is in addition to and not in derogation of any power of investment given a guardian or trustee under existing law, but to the extent that any statute now in force is in conflict herewith, the same shall be and is hereby repealed.