Which of the following is an example of a nonforfeiture option?
Asked by: Mrs. Michaela Mosciski I | Last update: August 12, 2025Score: 4.2/5 (57 votes)
Which is an example of a nonforfeiture option?
Life insurance policyholders can select one of four nonforfeiture benefit options: cash surrender value, extended-term insurance, loan value, and paid-up insurance. In permanent life insurance policies, if you fail to pay the premiums in the grace period, you won't lose your life insurance.
Which of the following is an example of nonforfeiture option Quizlet?
The correct answer is: The reduced paid-up insurance option allows the policyowner to purchase paid-up term coverage at a reduced face amount based on the amount of the policy cash value.
What is a non-forfeiture option?
A nonforfeiture clause is an element included in standard life insurance and long-term care insurance. It stipulates that the policyholder will receive a partial or full refund of premiums paid if the policy lapses after a defined period due to missed premium payments.
Which of the following nonforfeiture options offers the highest?
The nonforfeiture option with the highest death benefit is the Extended Term Insurance option, followed by the Reduced Paid-Up Insurance option.
Non-forfeiture Options - Life Insurance Exam Prep
Is reduced paid-up a Nonforfeiture option?
The nonforfeiture reduced paid-up benefit is 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.
What is a guaranteed insurability option?
Guaranteed insurability or guaranteed purchase option riders let you increase the amount of your life insurance policy's death benefit at a future date, without submitting to a medical exam. When you first buy life insurance, the insurer often requires a medical exam.
Which of these is not a common life insurance nonforfeiture option?
Which of these is NOT considered to be a common life insurance and nonforfeiture option? D. Life income annuity.
What is the nonforfeiture benefit?
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 nonforfeitable benefit?
(19) The term “nonforfeitable” when used with respect to a pension benefit or right means a claim obtained by a participant or his beneficiary to that part of an immediate or deferred benefit under a pension plan which arises from the participant's service, which is unconditional, and which is legally enforceable ...
Which of the following is true about nonforfeiture values?
The correct answer is B) They are required by state law to be included in the policy. Nonforfeiture values are provisions included in life insurance policies that protect policyholders from the complete loss of their policy's cash value if they decide to surrender or stop paying premiums.
What type of policy would offer a 40 year old?
The quickest accumulation of cash value for a 40-year-old would be through a 20-pay life insurance policy. It requires premium to be fully paid within 20 years, thus allowing quicker accumulation of cash value compared to other policies.
Which products does standard Nonforfeiture law apply to?
The Standard Nonforfeiture Law for Life Insurance is designed to protect policyholders who may not be able to continue paying their life insurance premiums. It ensures that these policyholders do not lose the value of their policy entirely.
Can I cash out my American income life insurance policy?
A policyholder can only cash out the amount of money accumulated as a cash value. Once the insurance is surrendered, the life insurance coverage is no longer active, and the policy may not be able to be reinstated. The cash value is the amount of cash that grows over time as the premiums are paid on time.
Is return of premium a Nonforfeiture option?
ROP policy non-forfeiture provisions allow you to continue life insurance coverage without any further premium outlay required. The option to design the ROP policy that reflects your particular needs and situation.
What does contingent nonforfeiture mean?
If an insurance carrier raises their rates on a block of business, and an insured cannot afford the increase, contingent nonforfeiture allows the insured to receive partial benefits. Insureds are only eligible for partial benefits under this clause if their policy lapses due to a rate increase.
What is an example of a Nonforfeiture option?
Common nonforfeiture options include reduced paid-up policies, extended-term insurance, and cash surrender value.
Which of the following is an example of a nonforfeiture?
Among the options listed, the Reduced Paid-Up option is an example of a nonforfeiture option in the context of insurance policies. A nonforfeiture option is a policy provision that allows the policyholder to receive some form of value from their policy if they choose to surrender it or stop paying premiums.
What are the three Nonforfeiture options?
All of the following are considered to be nonforfeiture options: cash surrender, reduced paid-up insurance, and extended term insurance. 3 nonforfeiture options offer flexibility, with the cash surrender nonforfeiture option allowing the policyholder to receive the policy's cash value.
What does nonforfeiture mean?
: failure or refusal to forfeit something. investigated the nonforfeiture of the shipment. often used before another noun. nonforfeiture offenses.
Which of these is not an example of a nonforfeiture option quizlet?
Which of these are NOT an example of a Nonforfeiture option? All of these are examples of Nonforfeiture options EXCEPT Life Income. The provision in a Major Medical policy that requires the insurance company pay only part of a loss and the insured to pay the balance is known as coinsurance.
What is long term care Nonforfeiture option?
A nonforfeiture benefit is an insurance policy provision specifying that an insured's equity in the policy cannot be forfeited. It offers the insured options for receiving the cash value of a policy that lapses.
Under what conditions will proof of insurability not be required?
Some group plans may not require proof of insurability if the applicant applies during the open enrollment period. Also, providers of plans offering lower or limited benefits may not need evidence of a policyholder's insurability. Also, convertible life insurance will not require additional evidence on conversion.
What does a non-forfeiture clause give the policy owner?
Explanation: A nonforfeiture clause in an insurance policy provides the policyowner with guaranteed values even if the policy has lapsed. This means that if the policyholder stops paying premiums, the policy will retain some value and not be completely lost.
At what age does guaranteed insurability end?
However, most guaranteed insurability riders place an age limit (often around 40) on pre-determined option dates. After you pass the age limit, you'll need to undergo a medical exam and new underwriting if you want to increase your life insurance payout as you age.