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.

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.

References in periodicals archive ?
This includes the nonforfeitability requirements and the restrictions on distributions described in Regs.
Although certain technical exceptions exist to the nonforfeitability of vested benefits, but they are not relevant here.
Darden (24) is whether a life insurance agent should be considered an employee of the insurance company so that he or she may invoke this nonforfeitability provision.
The contract must satisfy certain customer protection provisions that relate to disclosure, nonforfeitability, noncancellability, etc.
11) Periods in the uniformed services are deemed to constitute service with the employer or employers maintaining the plan in determining the nonforfeitability of the person's accrued benefits and the accrual of plan benefits.