Which of the following is NOT considered a nonforfeiture option?

To understand why the cash dividend option is not considered a nonforfeiture option, it is essential to recognize what a nonforfeiture option entails. Nonforfeiture options are specific provisions in life insurance policies that offer benefits to policyholders in the event that they stop paying premiums. These options come into play when a policyholder decides to discontinue premium payments; they help retain some value from the policy instead of losing it entirely.

The cash value option, reduced paid-up insurance, and extended term option all represent ways in which policyholders can utilize the accrued cash value of their policy. The cash value option allows policyholders to withdraw the accumulated cash if they surrender the policy. Reduced paid-up insurance enables policyholders to convert their existing policy into a permanent insurance policy of lesser coverage without the need to continue premium payments. The extended term option allows policyholders to use the cash value to purchase term insurance for a specific period, typically reflecting the original policy's value.

In contrast, the cash dividend option pertains to the distribution of surplus earnings back to policyholders from a participating whole life insurance policy. This option is not related to the retention of policy value upon non-payment of premiums but rather to the-sharing of profits of the insurance company based on its financial