What is true regarding nonforfeiture values in life insurance policies?

Nonforfeiture values in life insurance policies are essential features designed to protect policyowners by ensuring they receive some benefit if they decide to terminate their policy after making premium payments. The requirement for these values is mandated by state insurance laws, reflecting a commitment to consumer protection. This means that insurance policies must include provisions that allow policyowners to access benefits, such as cash values, reduced paid-up insurance, or extended term insurance, rather than losing all benefits upon cancellation.

By law, insurance companies must provide policyholders with options to realize the value of their policy even if they choose not to continue paying premiums. This regulation supports responsible financial planning and safeguards the interests of policyowners. The inclusion of nonforfeiture values ensures that policyholders are not left empty-handed after investing in their life insurance policy.