Question

Lionel purchased a $200,000 ordinary life insurance policy when he was 25 years old and had significant life insurance needs. Now Lionel is 50. His mortgage is almost paid-off and his children have left home and are financially independent. Lionel no longer wants to pay premiums, but he would like to have some permanent life insurance in force. Which nonforfeiture option could Lionel employ to meet these objectives?
A) cash value
B) reduced paid-up insurance
C) paid-up additions
D) extended term insurance

Answer 1

Answer:

Option b                                        

Explanation:

In simple words, Decreased pay-up insurance program, minus fees and costs, enables the policy holder to obtain a reduced price of fully paying medical insurance. The claimant's hit age will assess the New Policy nominal value. As a consequence, the mortality payment is greater than those of the program which has expired.

The provision can involve restoring a percentage of the gross premiums charged, the plan's cash restitution cost, or a diminished reward dependent on premium collected until the policy has expired.