Under the 'reduced paid-up' nonforfeiture option, the policyowner uses the cash value to obtain:
Explanation
The reduced paid-up option converts the existing cash value into a single premium for a smaller amount of permanent insurance that is completely paid up, so coverage continues for life with no more premiums. Taking the cash in a lump sum is the cash surrender option. Term insurance for the full face amount is the extended term option. A lifetime annuity is not a nonforfeiture option. Reduced paid-up keeps permanent coverage in force at a lower face amount without ongoing payments.
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Related questions on this topic
- The 'entire contract' provision in a life insurance policy states that the complete agreement between the parties consists of:
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