State RegulationsFL specificDifficulty 1/5
Which of the following is a standard nonforfeiture option for a Florida life policyowner who stops paying premiums?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Chapter 627, Florida Statutes, when a policyowner stops paying premiums on a policy that has cash value, the standard nonforfeiture options are cash surrender, reduced paid-up insurance, and extended term insurance. Extended term uses the cash value to buy paid-up term coverage for the same face amount for as long as the value lasts; loans, reinstatement, and accelerated benefits are entirely different rights, not nonforfeiture options.
Why the other options are wrong
- A) Reinstatement is the right to restore a lapsed policy, not a nonforfeiture option applied at lapse.
- C) A policy loan is a borrowing right under Fla. Stat. 627.458, not a nonforfeiture option.
- D) Accelerated death benefits advance part of the death benefit during lifetime; they are not a nonforfeiture option.
Memory hook
Nonforfeiture trio: cash, paid-up, extended term.