Life Policy ProvisionsQuestion 163 of 315
An owner of a lapsed whole life policy elects the reduced paid-up nonforfeiture option. What is the result?
a.A lump-sum cash payment equal to the cash value
b.Original face amount continues, but no further premiums are due
c.A smaller permanent policy with no future premiums, payable at death or earlier surrender
d.Term coverage equal to face amount continues until cash value is exhausted
Explanation
Reduced paid-up uses the cash value as a single premium to purchase a smaller fully paid-up permanent policy. No further premiums are due, coverage lasts for life, and the new face amount is less than the original.
Law Reference: Cal. Ins. Code §10209Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)