You’ve probably heard about the nonforfeiture clause at some point in life. That is mainly the case whenever you want to take advantage of what whole life insurance policy offers. Well, there is nothing wrong with leveraging what it offers since there is more to it than meets the eye. Actually, standard life insurance and long-term care insurance may have nonforfeiture clauses.

For those who may have no idea about what we are talking about, a nonforfeiture clause is an insurance policy stipulating that an insured can receive full or partial benefits. Alternatively, they are entitled to a partial refund of premiums after a lapse due to non-payment. No wonder it is in your best interest that you determine how it works before deciding on anything.

If you happen to be taking advantage of permanent life insurance policies, then you should not worry about losing your life insurance in the event that you fail to pay the premiums in the grace period. This is because your accumulated cash value will prove beneficial in different instance. For instance, it can work to your advantage the very moment you decide terminate your policy, and get the cash surrender value in hard cash.

Things are not any different if you want to go for reduced coverage for the remaining term of your policy with no future premiums. In the event that you fail to settle on one, then the terms of your policy generally stipulate the option to go into effect. That’s, of course, when the policy lapses or is surrendered.

Keep in mind there are different payout options under a nonforfeiture clause. Some of the most notable ones include cash surrender value, extended-term insurance, loan value of policy loans and many more. Be sure to find out the pros and cons of each before coming to a conclusion.

There you have it, some of the things you probably did not know about nonforfeiture clauses. The good news is that you can always leverage the internet and find answers to all your questions without the hassle.