Nonforfeiture clause

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Nonforfeiture Clause

A clause in some insurance policies entitling a policyholder to receive the benefit, or a portion of it, for a short period of time after allowing the policy to lapse. That is, if the policyholder does not pay the premium as agreed, he/she is still entitled under a nonforfeiture clause to the benefit should the insured event occur within a certain, brief period of time. Alternatively, a nonforfeiture clause may entitle a policyholder to a partial refund of the premiums paid.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Nonforfeiture clause.

If there is a nonforfeiture clause in your insurance policy contract, and you have let the policy lapse because you haven't paid a premium that's due, you may qualify for the benefit named in the contract for a limited time, for a smaller benefit, or for a partial refund of your premium.

However, the added protection of adding a nonforfeiture clause generally increases the premium for the policy.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
"The damages suffered by the agency due to delayed/non-completion of the contracts/projects within the timelines may not be recovered due to non-imposition of LDs and non-forfeiture of performance securities against the contractors, an indication of agency's laxity in enforcing the stipulations specified in the contract agreements to the disadvantage of the government," COA said.
"Several contracts with an aggregate amount of P684.42 million were not terminated in due time resulting in the accumulation of uncollected liquidated damages of P74.304 million and non-forfeiture of P208.899 million performance security, depriving the government of the compensation it suffered from the suppliers' default," COA said in the 2018 annual audit report for PS-DBM.
According to him, 'the break down include: N11.5 bn final forfeiture (cash and accounts); N133.8 bn non-forfeiture recoveries; N8.92 billion direct deposits; N38.64 bn tax recoveries; N4.30 bn fuel subsidy recoveries and N42 bn banks (third party).
Applicant was provided undue benefit due to non-forfeiture of 10pc of total premium, audit report states
Of the rest, 8% have taken reduced benefits and only 5% have chosen the non-forfeiture option.
In last month's column, we explored how whole life can be funded in a way that could guarantee a paid-up policy either contractually or through the use of a non-forfeiture option.
Securities law has generally recognized that products that satisfy the requirements under state law relative to the standard non-forfeiture law should not be treated as securities because the insurance company bears the investment risk.
In addition, they could consider contingent non-forfeiture provisions, so if another 90% increase comes down the pike, at least they could salvage some coverage rather than forfeit all premiums paid.
In particular, one fundamental aspect of traditional life insurance that cannot be offered by a family takaful plan is the non-forfeiture benefit, i.e., the guaranteed cash values of the policy.
Inflation of Daily Benefit Compound lifetime: 5%; Simple lifetime: 5% Benefit Periods 2 years, 3 years, 5 years and 10 years Admission / benefit triggers Chronically ill (expect to need services for at least 90 days), cognitive impairment, unable to perform 2 out of 6 ADLs Additional type of benefits Adult day care, alternate plan/ provided for base policy: informal care, assisted living, bed reservation, durable medical equipment, home modification, homemaker services, hospice care, respite care Optional Riders Non-forfeiture Average application processing 22 days time The State Life Insurance Company (800) 275-5101 www.assetbasedltc.com Product Name Asset-Care States available Product is unavailable in NJ, NY, VI, Guam, PR Min.
Under the amendment, Bellamy said, to be exempt from Rule 151A, underwriters and agents selling indexed products must not sell a variable product; they must comply with state non-forfeiture laws; and they must comply with a suitability standard.
These features include spousal discounts, respite care, hospice care, caregiver training, bed reservation, medical equipment, cognitive reinstatement, non-forfeiture benefits, case management and referral services.
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