Life insurance policyholders can select one of four nonforfeiture benefit options: the
cash surrender value
What are Nonforfeiture options in insurance?
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
.
Which of the following is a Nonforfeiture option of life insurance?
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
.
What Nonforfeiture option offers the highest death benefit?
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 of the following is an example of a Nonforfeiture option quizlet?
Nonforfeiture values include
cash surrender, extended term and reduced paid-up
.
What are the three 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 are Nonforfeiture values?
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 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.
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 these Nonforfeiture options continue a build up?
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”
.
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 utilizes non forfeiture options?
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 these are not an example of non forfeiture option?
S buys a
$50,000 whole life policy
with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? An insured is past due on his life insurance premium, but is still within the Grace Period.
Which of the Nonforfeiture option has the highest amount of insurance protection?
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 of the following is guaranteed to the policyowner through Nonforfeiture values?
Terms in this set (66) Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost
. … Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.
What are the 5 dividend options?
- 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 is paid-up option?
Paid-up life insurance is an option that
allows you to keep a whole life insurance policy in force without paying any premiums for a while
, or permanently. It is only an option if you have already built up a significant cash value in your policy.
What are settlement options?
Definition: Under a settlement option,
the maturity amount entitled to a life insurance policyholder is paid in structured periodic installments
(up to a certain stipulated period of time post maturity) instead of a ‘lump-sum’ payout. Such a payout needs to be intimated to the insurer in advance by the insured.
Why is non forfeiture option used?
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 reduced paid-up 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 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.
When a misrepresentation on a life insurance policy application is discovered what action?
When a misrepresentation on a life insurance policy application is discovered, what action may an insurance company take?
Void the policy only if it is discovered during the Contestable period and proven to be material
. P purchases a $50,000 whole life insurance policy in 2005.
Which of these actions is taken when a policyowner uses a life?
Which of these actions is taken when a policyowner uses a Life Insurance policy as collateral for a bank loan?
Collateral assignment
” A policyowner using the Life Insurance policy as collateral for a bank loan normally would make a collateral assignment.
What is elimination period in insurance?
Elimination period is a term used in insurance
to refer to the time period between an injury and the receipt of benefit payments
. … Before benefits are paid, most insurance policies require a policyholder to qualify throughout the elimination period.
What is unintentional lapse protection?
The idea is to
designate someone who is close enough to the insured that
if they receive a notice of nonpayment for the insured, they will know to take action. The unintentional lapse provision is specifically included in long term care applications in order to protect people who may develop a cognitive impairment.
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 is a Nonforfeiture benefit rider?
It’s
an insurance rider that protects insureds in the event they miss a premium payment and their policy lapses
. If a policy lapses due to lack of payment, the nonforfeiture rider allows the insured to receive a portion of the benefits or a partial refund based on the premiums paid before the policy lapsed.
Which of the following Nonforfeiture options would be automatically implemented?
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
.
What is a contingent benefit upon lapse?
Like the nonforfeiture benefit, the contingent benefit upon lapse
will pay up to the total amount of all premiums paid
, or 30 times the daily nursing home benefit at the time the policy lapsed—whichever is greater.
What is annuity Nonforfeiture?
The minimum nonforfeiture rate is
the lowest interest rate guarantee an insurer can use in an annuity
contract to determine the annuity’s cash value.
Which of the following Nonforfeiture options of a life insurance policy allows a policyowner?
What nonforfeiture option allows the policyowner to receive the policy’s cash value?
The cash surrender value
allows the policyowner to receive the policy’s cash value.
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.
What does Nonforfeiture mean?
A nonforfeiture (sometimes hyphenated) clause is
an insurance policy clause stipulating that an insured party can receive full or partial benefits
or a partial refund of premiums after a lapse due to nonpayment.
What is the purpose of Nonforfeiture values quizlet?
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.
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 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.
Because
universal life policies
will always deduct policy expenses from available cash value, they do not have an automatic premium loan feature. Whole life insurance policies will never automatically take policy cash values to pay the premium due, so the APL feature is the way to effectively accomplish this goal.
Which of the following is true about the annuity period?
It is the period of time during which the annuitant makes premium payments into the annuity. Answer: A.
It may last for the lifetime of the annuitant
. An annuity is basically a plan which a person buy by making a lumpsum payment to a insurance company generally to get regular payment for life.
