Non-Forfeiture option

What are the three nonforfeiture options?

(1) Cash surrender value — surrender the policy for a lump-sum cash payment. (2) Extended term — use cash value to buy term insurance for the same face amount, for as long as cash value allows. (3) Reduced paid-up — use cash value to buy a smaller paid-up whole life policy.

Which nonforfeiture option is the automatic default if none is selected?

Extended term insurance is the default if no option is selected within 60 days of lapse.

Which nonforfeiture option provides the greatest immediate death benefit?

Extended term — same face amount as the original policy but for a limited time. Reduced paid-up provides permanent coverage but at a lower face amount.

Which nonforfeiture option provides coverage for the longest time?

Reduced paid-up — provides permanent (lifetime) coverage, though at a reduced face amount. Extended term only lasts for a limited period.

Which nonforfeiture option does NOT allow reinstatement?

Cash surrender value — once surrendered, the policy is terminated permanently and cannot be reinstated.

Do nonforfeiture values continue any riders?

No. When a nonforfeiture option is elected, all riders (waiver of premium, AD&D, etc.) typically terminate.