Final answer:
Nonforfeiture options allow a life insurance policy to retain some value without further premiums. These include Cash surrender, Extended term, and Reduced paid-up. Interest only is not a Nonforfeiture option but a settlement option used after the insured's death.
Step-by-step explanation:
The question relates to Nonforfeiture options available to policyholders in a life insurance policy, which allow for the policy to maintain some value in case premiums are no longer paid.
These Nonforfeiture options include Cash surrender, in which the policyholder receives the cash value of the policy; Extended term, where the cash value is used to purchase term insurance for a specific period; and Reduced paid-up, which provides a reduced amount of coverage without requiring further premiums.
However, Interest only is not a Nonforfeiture option; it is actually a settlement option where the insurance company holds the policy proceeds and pays interest to the beneficiary. This option can be used by beneficiaries after the insured's death rather than by policyholders while the policy is in force.