Final answer:
An additional premium payment on an Adjustable Life policy typically impacts the coverage length, face amount, and premium paying period. However, it does not reduce the value of nonforfeiture options; rather, these options are likely to increase in value, which makes option d the correct answer.
Step-by-step explanation:
The student's question pertains to an Adjustable Life policy and the impact of an additional premium payment on the policy's terms. Generally, additional premium payments in such life insurance policies can have multiple effects:
- The length of coverage might extend if the additional payment amounts to pre-paying future premiums.
- The face amount of the policy could increase, providing a higher death benefit to the beneficiaries.
- The period over which premiums are to be paid might decrease if the surplus premium shortens the payment schedule.
- However, the value of nonforfeiture options would not decrease. Nonforfeiture options, like cash surrender value or reduced paid-up insurance, are designed to protect the policyholder's interests and are typically based on the policy's accumulated cash value, which would likely increase with the additional payment.
Therefore, the correct answer to the student's question is d. The value of nonforfeiture options may decrease, as this is not a way that the policy is affected by the additional premium payment.