Nonforfeiture Clause

外汇网2021-06-19 13:53:10 60

A clause in an insurance policy that allows for the insured to receive all or a portion of the benefits or a partial refund on the pmiums paid if the insured misses pmium payments, causing the policy to lapse. The nonforfeiture clause may only be in effect for a limited period of time, and may only kick in after the policy has been active for several years.

Nonforfeiture clauses can be found in standard types of life insurance as well as long-term care insurance. The clause may involve returning some portion of the total pmiums paid, the cash surrender value of the policy, or a reduced benefit based on the amount of pmiums that were paid up until the policy lapsed.

While nobody should plan on letting a policy lapse, a nonforfeiture clause can be a savior if somebody forgets to pay pmiums or is unable to pay them for an extended period. Having a nonforfeiture clause will typically add to the pmium amount over a similar policy without one.

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