A nonforfeiture provision can specify options for retaining some value or reduced benefits when certain premiums cease.
The distinction that matters
The available options depend on the contract; the term does not mean every policy retains a cash value after cancellation.
What to check
- Check eligibility and accumulated values.
- Compare reduced paid-up and surrender options.
- Review the effect on beneficiaries.
Example to discuss
A holder of an older cash-value policy requests current option values instead of assuming a risk-only policy has the same feature.
This is a hypothetical comparison, not a customer claim or a determination of cover.
Jurisdiction and scope
This is an explanation of terminology found in overseas life-policy material. It does not establish that a similarly named product is currently offered in Australia, or that US guarantees, tax treatment or legal rules apply here.
Sources and further reading
General information only. The policy, schedule and applicable rules determine the actual position. For a personal decision, use an appropriately qualified adviser or the relevant provider.