Values

AAA

DEFINITION of 'Values'

The worth of a nonforfeiture clause that specifies that an insured party would receive the equity from a life insurance policy, in the event that the policy were canceled because the premium payments were not made. The policy's value would be returned to the policy holder in some manner, either through a partial refund of the premiums that had been paid to date, or through the payment of a portion of the benefits.

INVESTOPEDIA EXPLAINS 'Values'

Life insurance policy holders can select one of four nonforfeiture benefit options: the cash surrender value, extended term insurance, loan value and paid-up insurance. If the policy holder does not make a selection, the terms of the policy will generally stipulate which option would go into effect, in the event that the policy lapses or is surrendered.

RELATED TERMS
  1. Surrender Period

    The amount of time an investor must wait until he or she can ...
  2. Surrender Rights

    A right to cancel an annuity or life insurance contract in exchange ...
  3. Life Insurance

    A protection against the loss of income that would result if ...
  4. Nonforfeiture Clause

    A clause in an insurance policy that allows for the insured to ...
  5. Cash Surrender Value

    The sum of money an insurance company will pay to the policyholder ...
  6. Buyout Settlement Clause

    An insurance contract provision that allows the insured to refuse ...
RELATED FAQS
  1. How much life insurance is enough?

    There are many factors to consider when calculating life insurance. Some of those factors include marital status, dependents, ... Read Full Answer >>
  2. What is the difference between moral hazard and adverse selection?

    Adverse selection occurs when there's a lack of symmetric information prior to a deal between a buyer and a seller, whereas ... Read Full Answer >>
  3. What is the theory of asymmetric information in economics?

    The theory of asymmetric information was developed in the 1970s and 1980s as a plausible explanation for common phenomena ... Read Full Answer >>
  4. What is the difference between the loss ratio and combined ratio?

    The loss ratio and combined ratio are two ratios used to measure the profitability of an insurance company. The loss ratio ... Read Full Answer >>
  5. How do I calculate the combined ratio?

    The combined ratio is a quick and simple way to measure the profitability and financial health of an insurance company. The ... Read Full Answer >>
  6. What does the lapse ratio in the insurance sector measure?

    The lapse ratio measures the amount of insurance policy renewals with respect to the total number of insurance policies at ... Read Full Answer >>
Related Articles
  1. Home & Auto

    A Look At Single-Premium Life Insurance

    Want to provide for your dependents and finance your own long-term care? Learn more here.
  2. Options & Futures

    Permanent Life Policies: Whole Vs. Universal

    If you're looking for life-long security, choosing between these two is the key.
  3. Retirement

    Variable Vs. Variable Universal Life Insurance

    Do you know why you might need one policy versus the other? Read on to find out.
  4. Insurance

    Life Insurance: Putting A Price On Peace Of Mind

    Would your death leave loved ones financially stranded? Find out how to ease your mind and keep them protected.
  5. Options & Futures

    Let Life Insurance Riders Drive Your Coverage

    Find out how these additional benefits can help you customize your policy.
  6. Retirement

    IUL Insurance: An Alternative Retirement Plan?

    Indexed universal life insurance is the rise. But critics argue that wisely allocated IRA and 401(k) funds will normally offer better returns.
  7. Economics

    What is Adverse Selection?

    Adverse selection occurs when one party in a transaction has more information than the other, especially in insurance and finance-related activities.
  8. Insurance

    Life Insurance: How Much Does Age Raise Your Rate?

    If you need life insurance, try to get it before your next birthday. Here's why.
  9. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  10. Insurance

    How to Use a Waiver of Subrogation

    A waiver of subrogation means that a party to a contract waives the right to allow someone (usually an insurance company) to sue the other party to the contract in case of a loss.

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center