Which is true about the cash surrender nonforfeiture option
Which is true about Nonforfeiture values?
Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered. Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option.
What is true cash surrender?
The cash surrender value is the sum of money an insurance company pays to a policyholder or an annuity contract owner if their policy is voluntarily terminated before its maturity or an insured event occurs. Cash value is the amount of equity in a policy against which a loan can be made.
Which of the following are Nonforfeiture options?
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 happens when a policy is surrendered for cash value?
What happens when a policy is surrendered for its cash value? Coverage ends and the policy cannot be reinstated. … Policy loans can be made on policies that do not accumulate cash value.
What is extended term 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.
When a whole life policy is surrendered for its Nonforfeiture value What is the automatic option quizlet?
The automatic nonforfeiture option is: 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. The cash value will continue to increase.
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.
What is surrender value of policy?
Definition: It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity. A regular premium policy acquires surrender value after the policyholder has paid the premiums continuously for three years. …
What is a surrender benefit?
The surrender value is the actual sum of money a policyholder will receive if they try to access the cash value of a policy. Other names include the surrender cash value or, in the case of annuities, annuity surrender value.
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 is an example of a Nonforfeiture option quizlet?
Nonforfeiture values include cash surrender, extended term and reduced paid-up. Interest only is a settlement option. Brandon is rendered totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?
Which of these Nonforfeiture options continue to build up cash value?
Which Nonforfeiture Option Continues to Build up Cash Value? The reduce paid-up option will continue to build up cash value. It will do this through the accumulation of guaranteed interest and (if applicable) the payment of dividends assuming the dividend option is set to paid-up additions.
Which Nonforfeiture option has the highest amount of insurance protection quizlet?
Which nonforfeiture option has the highest amount of insurance protection? Extended Term – The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.
When the insurance select the extended term Nonforfeiture option the cash value will be used to purchase term insurance with what face amount?
If you chose the extended term nonforfeiture, then your accumulated cash value would purchase an extended term insurance policy with a term of 30 years and death benefit equal to the original insurance plan.
What is the other term for the cash payment settlement option?
What is the other term for the cash payment settlement option? c)Lump sum. Upon the death of the insured, the contract is designed to pay the proceeds in cash, called a lump sum.
Which Nonforfeiture option provides coverage for the longest period?
Answer D is correct. The Cash Surrender Value is the Nonforfeiture Option that allows the owner to withdraw the cash value upon the surrender of the policy. Answer A is correct. Reduced Paid-Up provides the longest period of coverage.
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 kind of policy allows withdrawals or partial surrenders?
What type policy allows a partial surrender? A partial surrender is allowed in a universal life policy.
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.
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.