New York Insurance Exam Practice Question
What is the purpose of a policy's nonforfeiture options?
Correct Answer: B
Rationale: Nonforfeiture options are designed to protect policyholders by ensuring they receive some benefits even if they stop paying premiums and the policy lapses. Option B accurately reflects this purpose, as it allows policyholders to access their accumulated value or benefits instead of losing everything.
Option A is incorrect because nonforfeiture options do not cancel the policy; rather, they provide alternatives to avoid total loss. Option C is misleading, as nonforfeiture options do not increase premiums; they are about preserving value. Option D is also wrong, as these options do not waive the death benefit but instead ensure some level of protection or value remains for the policyholder.
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