The lives of a group of individuals may be insured under a policy issued to a credit union organized under the laws of the state or the Federal Credit Union Act, which shall be considered the policyholder, to insure eligible members for amounts of insurance not in excess of the share balance of each member, based upon some plan that will preclude individual selection, for the benefit of someone other than the credit union or its officials and subject to the following requirements:

(1) the members eligible for insurance under the policy shall be all the members of the credit union who meet standard physical requirement conditions of the insurer, or all of any class or classes of them determined by conditions pertaining to their age, or to membership in the credit union, or both;

(2) the premiums for the policy shall be paid by the policyholder, either wholly from the credit union's funds, or partly from these funds and partly from funds contributed by the insured members specifically for their insurance; a policy may not be issued on which the entire premium is to be derived from funds contributed by the insured members specifically for their insurance; a policy on which part of the premium is to be derived from funds contributed by the insured members specifically for their insurance may be placed only if at least 75 percent of the then eligible members, excluding those whose evidence of individual insurability is not satisfactory to the insured, elect to make the required contribution; a policy on which no part of the premium is to be derived from funds contributed by the insured members specifically for their insurance must insure all eligible members or all except those whose evidence of individual insurability is not satisfactory to the insurer;

(3) the policy must cover at least 25 members at the date of issue.