Which Nonforfeiture option has the highest amount of insurance protection?
Asked by: Kacie Botsford | Last update: February 11, 2022Score: 4.6/5 (58 votes)
Which nonforfeiture option has the highest amount of insurance protection? The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.
Which Nonforfeiture option provides coverage for the longest of time?
The option that will provide guaranteed coverage of the original death benefit for the longest period of time is the extended term insurance option.
What are the three Nonforfeiture options?
These are ways the cash values can be paid out or used by the policyowners. There are three nonforfeiture options: (1) cash surrender; (2) reduced paid- up insurance; and (3) extended term insurance. If a policyowner chooses, he/she may request a cash payment of the cash values when the policy is surrendered.
When they reduced paid-up Nonforfeiture option is chosen what happens to the face amount of the policy?
Reduced paid-up insurance option allows the policy owner to receive a lower amount of fully paid whole life insurance, excluding commissions and expenses. The attained age of the insured will determine the face value of the new policy. As a result, the death benefit is smaller than that of the lapsed policy.
Which is true about Nonforfeiture values?
Terms in this set (125) Which of the following is TRUE about nonforfeiture values? ... Nonforfeiture values are required by state law to be included in the policy, and cannot be altered by the policyowner. A table showing the nonforfeiture values for the next 20 years must be included in the policy.
Learn Nonforfeiture Options for your Life and Life and Health insurance license exams.
What are Nonforfeiture values in insurance?
Nonforfeiture Values — in whole life insurance policies, benefits that accrue to the insured when the policy lapses from nonpayment of premium. These benefits are usually either an amount of paid-up term life insurance or a cash surrender value.
What is Nonforfeiture factor?
(C) The nonforfeiture factor is a percentage of the adjusted premium, as defined in division (D)(2) of section 3915.071 of the Revised Code, for each policy year. ... If the amount of insurance is not uniform, the amount is the average amount of insurance in force at the beginning of each of the first ten policy years.
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.
Which of the following is an example of Nonforfeiture option quizlet?
Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option. You just studied 36 terms!
What reduced paid-up insurance is as a Nonforfeiture option?
Nonforfeiture Reduced Paid-Up Benefit — a life insurance policy nonforfeiture benefit option to use the cash surrender value of the policy to purchase a fully paid-up life permanent insurance policy for a lesser amount of coverage. ... Also known as reduced paid-up insurance.
Which is the Nonforfeiture option in life insurance policy?
A nonforfeiture option is a clause in your policy that allows you to receive full or partial benefits from your life insurance if the policy lapses or you want to cancel the plan. Reduced paid-up insurance is a nonforfeiture option that is included with your life insurance coverage.
What is the default Nonforfeiture option quizlet?
Nonforfeiture Option - use the cash value to purchase a Term Life policy with the same face value as the canceled Whole Life policy and extend coverage for as long as the money will take it. This is the automatic default nonforfeiture option.
Which of the following Nonforfeiture options does not allow the insured to reinstate the policy?
The extended term and reduced paid up nonforfeiture options allow the policyowner to reinstate the original policy because coverage is still in effect. However, the cash surrender option does not allow the policy to be reinstated because the policy has been surrendered for its cash value, and no coverage remains.
Which Nonforfeiture option provides coverage for the longest of time quizlet?
Which nonforfeiture option provides coverage for the longest period of time? Correct! The reduced paid-up nonforfeiture option would provide protection until the insurer reaches 100, but the face amount is reduced to what the cash would buy.
Which of the following provisions or options protects the insured from an unintentional policy lapse?
The purpose of the grace period provision is to protect the policyholder against an unintentional lapse of the policy.
Which of the following protects the insured from an unintentional policy lapse?
What protects the insured from an unintentional policy lapse due to a nonpayment of premium? Automatic premium loan. Automatic premium loan provision is not required, but is commonly added to contracts with a cash value at no additional charge.
Which of the following is false regarding life insurance policy illustrations?
Which of the following is false regarding life insurance policy illustrations? Policy illustrations are the nonguaranteed elements of a policy and are not part of the policy summary.
Which of these Nonforfeiture options continue a buildup of cash value?
Which of these Nonforfeiture Options continue a build-up of cash value? A Reduced Paid-Up option would provide continuing cash value build-up. The correct answer is "Decreasing term rider". A decreasing term rider can add additional coverage to a whole life policy.
Which of the following types of insureds are life insurance companies allowed to make?
Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against? A life insurance company may make policy rate discriminations against people that smoke.
What is the Nonforfeiture value of an annuity?
The nonforfeiture amount is the deferred annuity's accumulated value minus certain charges (such as prior withdrawals and loans), based on interest rate minimums regulated by statute.
What is Nonforfeiture benefit for 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.
Which Nonforfeiture option allows the policyowner to purchase less coverage for life?
Reduced paid-up insurance is a nonforfeiture option that allows the policy owner to receive a lower amount of fully paid whole life insurance, excluding commissions and expenses. 1 The attained age of the insured will determine the face value of the new policy.
What is the standard Nonforfeiture law?
(1) For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year shall be equal to one hundred and twenty-five percent (125%) of the calendar year statutory valuation interest rate for such policy as defined in the ...
What does twisting mean in insurance?
Twisting — the act of inducing or attempting to induce a policy owner to drop an existing life insurance policy and to take another policy that is substantially the same kind by using misrepresentations or incomplete comparisons of the advantages and disadvantages of the two policies.
What are dividend options?
Dividend Options — varying ways in which insureds may elect to receive dividends under a life insurance policy. Dividends may be received in the form of cash payments, as increases to the policy's cash value, or as paid-up additional insurance.