Life Insurance Basics
What is a life insurance nonforfeiture option?
A nonforfeiture option is a provision in a permanent life insurance policy that gives you options if you stop paying premiums. Common nonforfeiture options include: cash surrender value (receive the cash value), reduced paid-up insurance (smaller paid-up policy), and extended term insurance (term coverage for the full death benefit).
Key Points
- Nonforfeiture option: options if you stop paying premiums
- Cash surrender value: receive the cash value
- Reduced paid-up insurance: smaller paid-up policy with no more premiums
- Extended term insurance: term coverage for full death benefit
- An independent agent can help you understand nonforfeiture options