What does Nonforfeiture option mean?
A non-forfeiture option. (or clause) is a provision included in certain life insurance policies stipulating that the policyholder will not forfeit the value of the policy if the policy lapses after a defined period due to missed premium payments.
What are the 3 Nonforfeiture options?
There are three nonforfeiture options: (1) cash surrender; (2) reduced paid- up insurance; and (3) extended term insurance.
What Nonforfeiture option offers the highest death benefit?
Which Nonforfeiture option offers the highest death benefit? The option that will provide guaranteed coverage of the original death benefit for the longest period of time is the extended term insurance option.
Is Extended term Nonforfeiture option?
Extended term insurance is a nonforfeiture option on a whole life policy that uses the policy’s cash value to buy term insurance for the current whole life death benefit for a specified period of time.
What are examples of Nonforfeiture option?
Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance.
Which Nonforfeiture option is the automatic option?
Which nonforfeiture option is the “automatic” option? If the policyowner cannot be reached, premium payments have ceased, and the policy’s cash value is eliminated, the insurer will automatically use the extended term option.
What is an example of Nonforfeiture option?
Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. You can buy an extended-term insurance policy with the remaining cash surrender value.
What is an example of a Nonforfeiture option?
Life insurance policyholders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value, and paid-up insurance. You can use your accumulated cash value to pay the future premiums (also referred to as an automatic premium loan).
What is cash surrender Nonforfeiture option?
Cash value surrender is the most basic nonforfeiture option that is available. In this case, you would forfeit your life insurance for the cash value that has built up in the policy. Before issuing the cash value payment to you, any outstanding loans or premiums owed would be deducted by your insurer.
Which of the following is an example of Nonforfeiture option?
What does contingent Nonforfeiture mean?
Contingent Nonforfeiture A reduced benefit provided to some policyholders whose policies terminate, sometimes called a “lapse.” The amount of the reduced benefit is the total premiums you paid for the policy, without interest.
What is Nonforfeiture option in long term care?
Nonforfeiture: A Nonforfeiture Benefit must be offered with Long Term Care Insurance policies. The nonforfeiture benefit is designed to ensure that if you lapse your policy (i.e., stop paying premiums) after a specified number of years, you retain some benefits from the policy.
What is a non-forfeiture option (NFO)?
What is NFO (Non Forfeiture Option)? NFO stands for Non Forfeiture Option. It essentially enables you to choose how you receive the policy benefits in case of a lapsation due to non-payment of premiums.
What is extended term non-forfeiture option?
Extended term insurance is a nonforfeiture option which may be included with insurance to extend the coverage for a limited period of time upon the failure of a policy-holder to pay the premiums. If premiums are not paid, any dividend additions or accumulations, minus any indebtedness, will be used as a single premium payment for that term.
When are non forfeiture provisions used?
Non-forfeiture provisions are used when the insured stops making premium payments on a cash value policy.
What is a nonforfeiture benefit?
Definition of nonforfeiture benefit. : a benefit (as in cash or insurance) received by a policyholder who after making premium payments for at least the minimum period as provided wishes to discontinue further premium payments.
