The bottom line What are life insurance nonforfeiture options? They are choices that preserve some value in a permanent life insurance policy after premiums stop. The common paths are cash surrender, reduced paid-up insurance, and extended term insurance. Each trades cash, benefit size, or coverage duration differently, so the policy contract matters. Key facts These … Read more
The bottom line How is policy loan interest calculated? Your insurer applies the policy’s stated loan rate to the unpaid loan balance, then adds interest according to the contract’s schedule. A fixed rate stays level; a variable rate can change. Unpaid interest increases the balance and can reduce the policy’s safety margin. A policy loan … Read more
The bottom line How dividends were supposed to pay premiums is best understood as a policy election, not a promise of free coverage. A participating life insurance policy may declare a dividend, and the owner can often direct it toward the premium. The dividend is not guaranteed, so budget for the contractual premium. Participating whole … Read more
The bottom line What happens to riders after reduced paid up depends on the policy contract: the base whole life coverage becomes a smaller paid-up benefit, while a rider can end, stay in force, or change only if its own terms permit it. Ask the insurer for a rider-by-rider illustration before you elect the option. … Read more
The bottom line Does a policy loan require credit approval? Usually not: a policy loan is secured by the cash value in a permanent life insurance policy, so the insurer generally looks to the contract and available value rather than your personal credit score. You still need a policy with loan value, and growing interest … Read more
The bottom line How to surrender a cash value life insurance policy starts with requesting a written payoff from the insurer, checking surrender charges and policy debt, and confirming the tax basis. The contract ends when surrendered, so compare the net cash with your coverage needs before signing the insurer’s form. Surrendering a permanent life … Read more