what are nonforfeiture insurance policy options?

A non-forfeiture clause in an insurance policy is a benefit given to the policyholder. These provisions are typically found in a whole life policy or long term care policy. Non-forfeiture simply means that there is some value in the policy that cannot be lost if the policy lapses.

In a whole life policy with a non-forfeiture provision for example, you may be entitled to receive the cash value of the policy. Or perhaps you will receive a paid up term policy using the cash value of the whole life policy to purchase the term policy (depending on policy terms.) In other words, with a non-forfeiture clause, you cannot lose everything when your policy lapses.

For long term care policies, the non-forfeiture provision may allow for the policyholder to receive a portion of the previously paid premiums if the policy lapses. Again this is a benefit to the policyholder.

With term insurance, this provision will typically not be included. Thus, if you allow your policy to lapse, your term coverage will cease and you will receive nothing further from the insurance company. At that point, your insurance contract is complete.