Which Nonforfeiture option is the highest amount protection?

Asked by: Ebba Legros  |  Last update: February 11, 2022
Score: 4.2/5 (18 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 period?

The option that will provide guaranteed coverage of the original death benefit for the longest period of time is the extended term insurance option.

Which Nonforfeiture option provides coverage for the longest period 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.

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.

What is the benefits of choosing extended term as a Nonforfeiture option?

Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. The policy is calculated from the insured's attained age.

Learn Nonforfeiture Options for your Life and Life and Health insurance license exams.

39 related questions found

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 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.

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 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 Nonforfeiture value?

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.

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 of the following types of insurance policies is most commonly used in credit life?

Credit life insurance and credit disability insurance are the most commonly offered forms of coverage. They also may go by different names. For example, a credit life insurance policy might be called "credit card payment protection insurance," "mortgage protection insurance" or "auto loan protection insurance."

Which of the following 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.

What is pure death protection?

Pure death protection. provided under pure life insurance. If the insurer dids during the term, the policy pays the death benefit to the beneficiary. If the policy is canceled or expires prior to the insured's death, nothing is payable at the end of the term. There is no cash value or other living benefits.

What is guaranteed insurability option rider?

The Guaranteed Insurability Benefit Rider guarantees the policy owner the right to purchase additional permanent life insurance policies without evidence of insurability. On each option date specified in the contract, Nationwide will permit the purchase of an additional life insurance policy.

What are 5 dividend options?

Terms in this set (7)
  • Dividends. These are returns of excess premium charge to policy owners as a safety net for the insurer for a company expenses these are tax-free.
  • Cash payment. ...
  • Reduction of premium payments. ...
  • Accumulation at interest. ...
  • One year term option. ...
  • Paid up additions. ...
  • Paid up insurance.

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 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 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.

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!

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 accumulation at interest option?

What Is an Accumulation Option? An accumulation option is a policy feature of permanent life insurance that reinvests dividends back into the policy, where it can earn interest. Some types of insurance pay dividends to their policyholders each year when the insurance company performs better than estimated.

Which of the following protects the insured from an unintentional?

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 protects the insured from an unintentional policy lapse due to a nonpayment of premium quizlet?

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? ... Nonforfeiture option where cash value is used to make a single premium payment to purchase as much of the same type of insurance as possible.

What does Nonforfeiture 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.