Arkansas Life and Health Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

Alice finds she no longer is able to pay premiums on her $50,000 Whole Life Policy, but needs that amount of protection for her family. Which Nonforfeiture Option provides this protection?

Cash Surrender

The correct answer is A. Cash Surrender.

Cash surrender allows the policyholder to terminate the policy and receive the cash value amount. In this scenario, Alice can use the cash value from her whole life policy to continue providing the $50,000 protection for her family by using the cash to purchase a term policy. This option provides the needed protection while also allowing Alice to access the accumulated cash in the policy.

The other options are incorrect in this scenario because Extended Term, Paid-Up Additions, and Reduced Paid-Up Insurance do not provide the immediate cash needed to purchase a new term policy for the desired protection amount.

Get further explanation with Examzify DeepDiveBeta

Extended Term

Paid-Up Additions

Reduced Paid-Up Insurance

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