Question: When a life insurance policy is cancelled and the insured has selected the extended term insurance option, the cash value will be used to purchase form insurance that has a face value.

When the insured selects the extended term Nonforfeiture?

When the insured selects the extended term Nonforfeiture option? 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 happens when you reach the end of term life insurance?

At the end of your term, coverage will end and your payments to the insurance company will be complete. If you outlive your term life insurance policy, the money you have put in, will stay with the insurance company. Term life insurance is not a savings or investment plan.

What does extended term insurance mean?

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.

When the insured selects the extended term Nonforfeiture option the cash value will be used to?

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.

What is Nonforfeiture option in life insurance?

A non-forfeiture option. (or clause) is a provision included in certain life insurance policies stipulating that the policyholder will not forfeit the value of the policy if the policy lapses after a defined period due to missed premium payments.

When an insured dies who has first claim to the death proceeds of the insured life insurance policy?

Two “levels” of beneficiaries Your life insurance policy should have both “primary” and “contingent” beneficiaries. The primary beneficiary gets the death benefits if he or she can be found after your death. Contingent beneficiaries get the death benefits if the primary beneficiary can’t be found.

When an insured under a life insurance policy died the designated beneficiary?

Terms in this set (10) When an insured under a life insurance policy died, the designate beneficiary received the face amount of the policy as well as a refund of all the premiums paid.

When a misrepresentation on a life insurance policy application is discovered what action may an insurance company take?

The two-year period during which the insurer has the right to contest the insurance contract is called the “contestability period.” If, after the investigation, they find significant inaccuracies, referred to as “material misrepresentations”, they have the right to deny paying the life insurance claim.

What life insurance policy never expires?

Permanent life insurance refers to coverage that never expires, unlike term life insurance, and combines a death benefit with a savings component. The two primary types of permanent life insurance are whole life and universal life. Permanent life insurance policies enjoy favorable tax treatment.

Do you get your money back if you cancel life insurance?

Do I get my money back if I cancel my life insurance policy? You don’t get money back after canceling term life insurance unless you cancel during the free look period or mid-billing cycle. You may receive some money from your cash value if you cancel a whole life policy, but any gains are taxed as income.

Do I get my money back if I outlive my life insurance?

If you outlive your policy, your payout is cancelled. However, there is an exception. Return of premium or ROP as it’s sometimes referred to as gives you back your premiums. Though you will pay higher premiums than a regular term life policy, which is to be expected.

How does extended term work?

Instead of canceling their policy and losing their death benefit protection, the extended term insurance uses the value accumulated in the whole life policy to continue the death benefit as a term life insurance policy for a specific period of time.

What provision in an insurance policy extended coverage beyond the premium due date?

What provision in a insurance policy extends coverage beyond the premium due date? Grace period. Grace period is a mandatory provision found in all life and health insurance policies that provides coverage for a period of time after the premium becomes past due.

What is ETI coverage on life insurance?

Extended Term Insurance (ETI)— a type of Non-Forfeiture Option offered on cash value life insurance policies, which uses the cash value of the life insurance at the time of lapse, to purchase term insurance, at the same Face Amount, for as long a period as possible.