Which is a nonforfeiture option in a whole life policy?

• A. Cash surrender value
• B. Level term rider
• C. Policy loan
• D. Extended term rider

Answer: (A)

Nonforfeiture options are built into whole life policies to protect the policyholder if premiums stop being paid. The cash surrender value is the classic nonforfeiture option: it’s the amount you receive if you surrender the policy, built from the accumulated cash value minus any surrender charges. This lets you recover part of your investment instead of losing the policy entirely.

The other items don’t fit as nonforfeiture options in this context. A level term rider merely adds temporary term coverage, not a payout from the policy’s cash value. A policy loan uses the cash value as collateral for a loan rather than giving you a separate surrender payout. An extended term rider converts the policy’s value into a term policy, which is a different way to retain some protection but isn’t the standard nonforfeiture payout.