Nonforfeiture Benefit (option)
Definition of "Nonforfeiture benefit (option)"
Provision that the equity of an insured in a life insurance policy cannot be forfeited. There are four benefits a policyholder can select under the option: cash surrender value, extended term insurance, loan value, and paid-up insurance. If none is elected, a clause in the policy will stipulate the option that automatically goes into effect, usually extended term insurance.
Popular Insurance Terms
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Type of policy with premiums that are fully paid up within a stated period. For example, a 20-payment life insurance policy has 20 annual premium payments, with no further premiums to be ...
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