Investopedia

Continue to Site »

Nonforfeiture Clause

Filed Under »
Dictionary Says

Definition of 'Nonforfeiture Clause'

A clause in an insurance policy that allows for the insured to receive all or a portion of the benefits or a partial refund on the premiums paid if the insured misses premium payments, causing the policy to lapse. The nonforfeiture clause may only be in effect for a limited period of time, and may only kick in after the policy has been active for several years.
Investopedia Says

Investopedia explains 'Nonforfeiture Clause'

Nonforfeiture clauses can be found in standard types of life insurance as well as long-term care insurance. The clause may involve returning some portion of the total premiums paid, the cash surrender value of the policy, or a reduced benefit based on the amount of premiums that were paid up until the policy lapsed.

While nobody should plan on letting a policy lapse, a nonforfeiture clause can be a savior if somebody forgets to pay premiums or is unable to pay them for an extended period. Having a nonforfeiture clause will typically add to the premium amount over a similar policy without one.

Articles Of Interest

  1.

    LTC Annuities: 2 Safety Nets In 1

    Pairing insurance and an annuity sounds good, but do you really need this much coverage?

  2. Profit From Unwanted Life Policies With Life Settlement

    With a life settlement you could cash in on your policy money now.

  3. Taking The Surprise Out Of Long-Term Care

    Don't be caught unprepared - find out what to look for in LTC insurance policies.

  4. A New Approach To Long-Term Care Insurance

    This practical product can protect you from the rising cost of care and provide for your beneficiaries at the same time.

  5. What changes might I need to make to my insurance policy?

    The number one thing to remember about insurance is that, just like everything else, it changes over time. The top-of-the-line policy that you bought five years ago might not even be available ...

  6. The Beginner's Guide To Homeowners' Insurance

    Discover everything new homeowners need to know before they sign on the dotted line.

  7. Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.

  8. Why would you want a monthly benefit versus a daily benefit?

    An insurance benefit is the amount of money paid to or on behalf of the policyholder. Depending on what kind of insurance policy the policyholder signs up for, the payments are made directly ...

  9. How do I choose which insurance company to use?

    Picking an insurance company to use is not an easy task, considering the financial crisis of 2008 and 2009. Several financial institutions and insurance companies have gone out of business, merged ...

  10. What is an elimination period?

    Elimination period is a term used in insurance to refer to the time period between an injury and the receipt of benefit payments. In other words, it is the length of time between the beginning ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center