Are you looking forward to taking advantage of what the nonforfeiture policy offers? If so, there is nothing to worry about as it goes a long way in making sure you change your life for the better. But as is the case with any other clause, you need to be sure it is exactly what you need before giving it a try.
After all, there is no way you can leverage something you know nothing about. Fortunately, we are here to lend a helping hand and ensure you clear some of the doubts in your mind. In this article, we will take you through the working mechanism of the nonforfeiture clause.
In a nutshell, the insured will have to make premium payments for at least three years to stand the chance of benefitting from a nonforfeiture clause. As soon as the three-year marker has been attained, there are two ways in which you can activate the nonforfeiture clause.
In the first instance, the insurance company automatically applies the workforce option since the policyholder was not in a position to make premium payments. The second scenario occurs when a policyholder requests the nonforfeiture to be invoked on his or her policy. No wonder you ought to discuss this with your insurance company before deciding on anything.
Either way, you need to remember that the option to exercise a nonforfeiture benefit is only viable if the life insurance policy has accumulated cash value. If this is not enough, the nonforfeiture options will not be applicable to policies that lack cash value. Regardless of this, all available nonforfeiture options have the prospect to help the policyholder retain some or all of the value built in the original policy. Of course, this is as you enjoy a coverage that better suits your budget and needs.
Having a clear idea of how the nonforfeiture clause works goes long way in making sure you reap the numerous benefits it brings about. Be sure to spend some time doing your homework before you can finally give it a try.