Question: When A Life Insurance Policy Is Cancelled And The Insured Has Selected The Extended Term?

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When the insured selects the extended term Nonforfeiture?

If you chose the extended term nonforfeiture, then your accumulated cash value would purchase an extended term insurance policy with a term of 30 years and death benefit equal to the original insurance plan.

What is the benefit of choosing extended term as a Nonforfeiture?

Choosing the nonforfeiture extended term option allows the policy owner to use the cash value to purchase a term insurance policy with a death benefit equal to that of the original whole-life policy. The policy is calculated from the insured’s attained age.

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What is extended term option life insurance?

Extended Term Insurance — a nonforfeiture provision in a whole life policy that uses cash value to purchase term insurance equal to the existing amount of life insurance.

What happens when an insured person lives beyond the end of the term insurance coverage?

When you outlive your term policy, you will no longer have life insurance coverage —but you can convert to a permanent policy or buy new term insurance.

Which Nonforfeiture option is the highest amount protection?

Which nonforfeiture option has the highest amount of insurance protection? The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.

Which Nonforfeiture option offers the highest death benefit?

The option that will provide guaranteed coverage of the original death benefit for the longest period of time is the extended term insurance option.

What type of policy that can be changed from one that does not accumulate cash value to the one that does is a?

The type of policy that can be changed from one that does not accumulate cash value to one that does, is a: Convertible Term Policy.

Which of the following is the best reason to purchase life insurance rather than annuities?

Based on those very simplistic explanations, the best reason for purchasing life insurance rather than annuities would be to provide for your loved ones if you do not have much saved up. With life insurance, you gain an instant legacy. After that first premium is paid, should you die, your heirs have an instant estate.

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What is the advantage of reinstating a policy instead of applying?

The benefit of reinstating an existing policy rather than applying for a new policy is that you’ll likely pay less. If your health hasn’t changed, your insurer will honor the original pricing on your policy, Ardleigh says. If your health has changed, that could affect your rate (or your insurability).

What is the grace period of an insurance policy?

An insurance grace period is a defined amount of time after the premium is due in which a policyholder can make a premium payment without coverage lapsing. The insurance grace period can vary depending on the insurer and policy type.

How are settlement options paid?

The four most common alternative settlement approaches are: the interest option, under which the insurer holds the proceeds and pays interest to the beneficiary until such time as the beneficiary withdraws the principal; the fixed period option, under which the future value of the proceeds is calculated and paid in

What happens when a policy is surrendered for cash value?

What happens when a policy is surrendered for its cash value? Coverage ends and the policy cannot be reinstated. Equal to the original policy for as long a period of time that the cash values will purchase.

Do you get money back if you outlive term life insurance?

If you outlive your policy term, you get your money back, unlike with regular term life insurance. It’s much more expensive than regular term life insurance. The returned money isn’t taxed since it’s not income, but simply a return of the payments you made.

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Can I cash out my term life insurance policy?

Because the number of years it covers are limited, it generally costs less than whole life policies. But term life policies typically don’t build cash value. So, you can ‘t cash out term life insurance.

What happens when the owner of a life insurance policy dies?

A life insurance policy is no different. At the death of an owner, the policy passes as a probate estate asset to the next owner either by will or by intestate succession, if no successor owner is named. This could cause ownership of the policy to pass to an unintended owner or to be divided among multiple owners.

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