Which of the Following Statements About Nonforfeiture Options Found in Life

question 63

Multiple Choice

Which of the following statements about nonforfeiture options found in life insurance policies is true?

• A)Under the reduced paid-up option,the paid-up policy is term insurance.
• B)Under the extended term option,the amount of term insurance is less than the face value of the surrendered cash value policy.
• C)Under the reduced paid-up option,no additional premiums must be paid.
• D)Unless the policyowner has selected another nonforfeiture option,the cash value option goes into effect automatically.

---

Definitions:

Cost-cutting Proposal

A strategy or plan proposed to reduce expenses in order to improve profitability.

Reduction in Costs

Actions or strategies implemented to decrease expenses and improve profitability.

Increase in Sales

A rise in the quantity or dollar value of a company's sales over a certain period, indicating growth or improvement in market demand.

Maintenance Contract

An agreement where one party commits to maintain an asset owned by another party, typically in exchange for a fee.