Perminenant Life Insurance Non-Forfeiture Clause

The text says: “Many permanent life insurance policy have a ‘non-forfieture clause’ whereby the policy owner has the option to receive some portion of the benefits if the premium payments are missed…”

So how does this work? I own a policy, and I don’t make my payment, I can still get some benefits back from my policy? So if that's the case then why make any payment at all if I can get out?

Nonforfeiture options usually mean you convert the policy from one form to another based on the value built up to date. Common nonforfeiture options include reduced paid up, extended term and premium loan. This is different from taking money out of the policy.

Thanks breadmaker,

I reread the part and it seemed to make more sense now. So basically with a non-forefeit (as the name implies) if I miss a payment I don’t “forfeit” my entire policy. So there is still some value there although it may be not the “full face value” as it would have been if I didn’t miss my payment. I think there is a cash option available, although yes, there ususally is a conversion or extension to another policy that the built-up value would roll into.