Understanding What Goes into Nonforfeiture Clauses

If reading this, chances are you might already know about the different nonforfeiture options available at your disposal. That is mainly the case when you want to leverage what whole life insurance policy offers. And there is nothing wrong with taking this approach if the numerous benefits it brings mean anything.

Actually, standard life insurance and long-term care insurance may have nonforfeiture clauses. In simple words, a nonforfeiture clause is an insurance policy stipulating that an insured can receive full or partial benefits. Alternatively, they are entitled to a partial refund of premiums after a lapse due to non-payment.

That is why it always pays off to determine how it works before deciding on anything. In the event that you’re leveraging permanent life insurance policies, then you should not worry about losing your life insurance if you fail to pay the premiums in the grace period. This is because your accumulated cash value proves beneficial in different instance.

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For instance, it can work to your advantage when you terminate your policy, and get the cash surrender value in hard cash. Things are no different if you take a reduced coverage for the remaining term of your policy with no future premiums. In case you fail to settle on one, then the terms of your policy generally stipulate the option to go into effect.

Keep in mind there are different nonforfeiture options to leverage. Among the most notable ones include cash surrender value, extended-term insurance, and loan value of policy loans, to mention a few. Be sure to find out the pros and cons of each before deciding on anything.

The Bottom Line

The above are among the things you probably didn’t know about nonforfeiture options. The good news is you can always leverage the internet and find answers to all your questions without the hassle.

Take this as the opportune time to understand what makes the different nonforfeiture options at your disposal worth your attention. While it might seem like a waste of your precious time, it is worth everything in the long run.