What do Nonforfeiture Options offer to policyowners?

Nonforfeiture options provide policyowners with specific benefits in the event that they choose to stop paying premiums on their life insurance policies. These options are designed to protect the cash value that has accrued in a policy, ensuring that policyowners are not left empty-handed if they decide to discontinue their coverage.

The correct option highlights that nonforfeiture options grant policyowners ways to lapse or surrender their policies for cash values. This means that if a policyholder decides to stop paying premiums, they typically have the right to receive accumulated cash value in the form of either a cash surrender value or convert the policy into a reduced paid-up insurance policy. This ensures that the policyholder retains some value from their investment in the insurance policy, rather than losing everything upon lapsing the policy.

The other choices do not accurately describe nonforfeiture options. Immediate cash payouts upon death relate more to the death benefit aspect of life insurance rather than nonforfeiture. Increasing coverage without additional cost refers to riders or enhancements that can be added to a policy rather than a feature of nonforfeiture options. Guarantees of dividend payments are associated with participating policies, which provide dividends based on the insurer's surplus, but this is unrelated to nonforfeiture options focused