Question

Eddie wants to use a nonforfeiture option. Which of the following may Eddie not use?

Select one:
a. Cash surrender value
b. Accumulation at interest
c. Extended term
d. None of the above

Answer 1

In the context of insurance, a nonforfeiture option allows a policyholder to receive some value from the policy if they decide to surrender or cancel it. Eddie may not use the 'Extended term' nonforfeiture option.

Step-by-step explanation:

In the context of insurance, a nonforfeiture option allows a policyholder to receive some value from the policy if they decide to surrender or cancel it. Eddie may not use the 'Extended term' nonforfeiture option.

The 'Cash surrender value' nonforfeiture option allows Eddie to receive a one-time payment if he chooses to surrender the policy.

The 'Accumulation at interest' nonforfeiture option allows Eddie to keep the policy in force and earn interest on the accumulated cash value.

However, the 'Extended term' nonforfeiture option allows the policy to remain in force, with the cash value used to purchase a term life insurance policy for a specific number of years. Since Eddie wants to use a nonforfeiture option, he cannot select 'Extended term' as it keeps the policy active.