Question

Charlotte decides to exercise a nonforfeiture option. Which option is not available to her?

a. Reduce premium payment
b. Receive a lump sum of cash
c. Purchase paid-up term insurance
d. Purchase paid-up whole life insurance at a reduced face amount

Answer 1

Charlotte cannot purchase paid-up whole life insurance at a reduced face amount.

Step-by-step explanation:

Charlotte will not be able to purchase paid-up whole life insurance at a reduced face amount.

A nonforfeiture option is a provision in a life insurance policy that allows the policyholder to receive some value in case the policy lapses or is surrendered. The options typically include reducing premium payment, receiving a lump sum of cash, purchasing paid-up term insurance, or purchasing paid-up whole life insurance at a reduced face amount.

However, purchasing paid-up whole life insurance at a reduced face amount is not available to Charlotte as one of the nonforfeiture options.