Florida 2-14 Life And Annuity Practice Test

Nonforfeiture options protect a cash value life policy when you stop paying premiums. They guarantee you won’t lose the policy value; instead, you can use the accumulated cash value in one of three ways. You can take a cash surrender, getting cash now; you can keep some coverage by converting to extended term insurance, which uses the cash value to purchase term protection for a set period; or you can reduce the death benefit and convert to a paid-up policy, which has no further premiums due. This ensures you either access value now or retain some life insurance with reduced or paid-up coverage. Other ideas don’t fit because nonforfeiture isn’t about increasing the death benefit automatically when premiums are missed, nor about skipping premiums without any impact, nor about automatically converting to a universal life policy.