L&HNJmedium
Under New Jersey's standard nonforfeiture law for life insurance, which of the following is NOT a standard nonforfeiture option available to a policyowner upon lapse of a whole life policy with cash value?
ACash surrender of the policy's accumulated value as provided by the contract at lapse
BReduced paid-up life insurance purchased with the policy's available cash value
Automatic doubling of the policy's face amount upon lapse
DExtended term life insurance funded by the policy's available cash value
Why this is the answer
N.J.S.A. 17B:25 (NJ Standard Nonforfeiture Law) requires whole life policies to offer three options at lapse: cash surrender value, reduced paid-up insurance, and extended term insurance. There is no statutory option that doubles the face amount automatically.
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