Which of the following is a nonforfeiture option?

• A. Cash surrender value
• B. Continuation of coverage with reduced benefits
• C. Increased premium payments
• D. Conversion to term with increased premium

Answer: (A)

Nonforfeiture options are built-in choices that let you recover value if you stop paying premiums on a permanent life policy. Cash surrender value is the clearest example: you surrender the policy and receive the accumulated cash value, ending the policy. This provides immediate liquidity and avoids losing the policy’s value entirely. The other ideas described aren’t the standard nonforfeiture options in the same way—increasing premiums isn’t a defined nonforfeiture feature, and converting to term or continuing with reduced benefits describe policy changes rather than the basic cash-value options available when premiums cease. So, cash surrender value is the best example of a nonforfeiture option.