State RegulationsFL specificDifficulty 1/5
When may a Florida life policyowner first exercise a nonforfeiture option?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under Chapter 627, Florida Statutes, nonforfeiture options operate on the policy's cash value, so they become meaningful only after the policy has built cash value and the owner stops paying premiums. A brand-new policy has nothing to forfeit, the options require no insurer consent because they are the policyowner's contractual right, and at death the death benefit - not a nonforfeiture option - is paid.
Why the other options are wrong
- A) With no cash value there is nothing to apply a nonforfeiture option to; the options run on accumulated value.
- B) Nonforfeiture options are the owner's right once value exists; no insurer consent is needed.
- D) At death the beneficiary receives the death benefit; nonforfeiture options are living, lapse-time rights.
Memory hook
No cash, no forfeiture options.