L&HGeorgiamedium
Under Georgia's Standard Nonforfeiture Law for life insurance (O.C.G.A. § 33-25-4), what is the primary purpose of the nonforfeiture provisions?
ATo require insurers to pay dividends to all policyholders annually
BTo extend the grace period from 31 to 60 days
CTo prohibit policy loans on whole life contracts
To guarantee a minimum cash surrender value or paid-up insurance if the owner stops paying premiums
Why this is the answer
Georgia's Standard Nonforfeiture Law (O.C.G.A. § 33-25-4) requires every individual permanent life policy delivered in Georgia to provide statutorily computed nonforfeiture values when the owner stops paying premiums. These values are usually offered as cash surrender, reduced paid-up insurance, or extended term insurance. The rules use the CSO mortality table and a maximum interest rate set by statute, ensuring policyholders never forfeit accumulated equity due to lapse.
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