California Insurance License Exam Practice Test Practice Question
Under which policy provision can a policy be surrendered for its net cash value?
Correct Answer: D
Rationale: Surrendering a policy for its net cash value falls under nonforfeiture options, which allow policyholders to access accumulated cash value if they decide to terminate their policy.
Option A, dividend options, pertain to how dividends are distributed or utilized but do not involve cash surrender. Option B, settlement options, focus on how benefits are paid out to beneficiaries, not on cash value access. Option C, beneficiary options, relate to the designation of individuals who receive benefits upon the policyholder's death, rather than the policy's cash value. Thus, nonforfeiture options are specifically designed for cash value access.
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