nonforfeiture provision

A provision of life insurance policy, or of a statute applicable to such a policy, that in the event of the lapse of the policy when it has a reserve value, the insured shall be entitled under options as follows: (1) to receive the cash surrender value; (2) to have the insurance policy continue in force for the full amount for such a period of extended insurance as the reserve, applied on the single-premium basis, will purchase; (3) or to have the policy become a paid-up policy for such amount as the reserve will purchase. 29 Am J Rev ed Ins § 620. The provision in a statute whereby a life insurance company is precluded from issuing a policy which provides for the forfeiture of the same upon failure of the insured to pay a loan on the policy or interest thereon, without reference to the fact, as it may be in a particular case, that the total indebtedness on the policy, principal and interest, is less than the loan value. Keeley v Mutual Life Ins. Co. (CA7 Ill) 113 F2d 633.

Ballentine's law dictionary. . 1998.

Look at other dictionaries:

  • Adjusted Premium — An adjusted premium is the premium of a life insurance policy that is adjusted by amortizing the costs associated with acquiring the insurance policy. The adjusted premium is equal to the net level premium plus an adjustment, to reflect the cost… …   Investment dictionary

  • holder of life insurance policy — The named insured or an assignee, for the purpose of obtaining the cash surrender value under a nonforfeiture provision of the policy. 29 Am J Rev ed Ins § 686 …   Ballentine's law dictionary

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