we're going to talk about nonforfeiture benefits in uh this segment uh nonforfeiture benefits it's first of all kind of a wacky term in my from my perspective because uh it simply says what do I get if I don't forfeit the plan and and whenever you see the term nonforfeiture benefits you should just think what do I get if I Surrender the plan so let's talk about not non forfeiture benefits and there are four of those available for whole life insurance plans and so nonforfeiture benefits apply to Whole Life nonparticipating policies and whole life participating policies and you may recall in our previous segment we said participating policies allow you to receive dividends and you have five things that you can do with that dividend so let's now look at the forfeiture features available under whole life insurance there are four of them available again these are benefits available if you cancel your policy now term insurance as you may recall there's nothing available on cancellation if you cancel your term plan there's no cash value no account value because you are simply paying for Pure risk protection however one of the features with whole life insurance is that you've been building up a savings account the additional premium that you've been putting in has been invested for you and in fact you have been building up a savings account in that policy so now that I have a savings account in that policy and I decide I no longer need the insurance in fact I can get something back from it so on whole life insurance if you surrender your policy you in fact will get what's referred to as the cash surrender value and so that's whatever value is in your policy they will return that to you now one of the other features for uh life insurance policy is the ability to take out a loan against that cash value so obviously if you were to surrender a policy but you've already taken a loan against it then that loan amount is in fact going to be deducted from what you eventually get so the first nonforfeiture option is cash surrender value whatever value is in there that belongs to you secondly the second feature and it's the automatic feature uh it's called automatic premium loan and what the insurance company will do if you haven't sent the premium they haven't heard from you your premium was due and you haven't sent that money in maybe you're we in vacation uh and in fact your premium bill came in and you were unable to uh you didn't pay the premum premium and you're gone beyond the date that your premium is due now your policies will have a 30-day grace period they give you 30 days uh to pay the premium your coverage is still in effect but at the end of that 30 days if you still haven't paid your premium your policy will go in what's referred to as automatic premium loan and so what the insurance company will do is automatically they will start borrowing money from your cash value to pick pay your premium and so they'll keep doing that until there's no longer any money left and then uh your policy will lapse it will terminate so the automatic premium loan is the automatic feature if you have not made your premium payment and you haven't told the insurance company hasn't heard from you you haven't told them you want to cancel or you simply forgotten to pay your premium automatically they'll keep the insurance coverage in place as long as there's enough money in your cash value for them to borrow money to pay the premium the third nonforfeiture option is called reduced paid up insurance they will take whatever cash value you have in the account and they'll say with the amount of money we have here we can pay up a policy for you in other words we can use that money to buy less insurance than than you had but it'll cover you for the rest of your life so let's say for example you had an insurance policy with a $100,000 death benefit and maybe you had $20,000 of savings built up in that plan you decided no you don't want to keep that coverage any longer in fact you don't need 100,000 anymore uh you need less insurance you could go to the insurance company and say what will my $20,000 of cash value purchase me for the rest of my life and they may say oh we're going to be able to give you $43,000 of insurance fully paid for for the rest of your life we will use that $20,000 and give you a reduced amount of coverage but it's for the rest of your life that's referred to as reduced paid up insurance so they use the cash surrender value as a single premium to buy you as much insurance they can and cover you for the rest of your life the fourth nonforfeiture option is similar in that the they will use the cash value but they say oh we're going to continue to give you your $100,000 of coverage but we can only cover you for the next 7.3 years so at the end of 7.3 years your policy will terminate so you in fact will have the same $100,000 of coverage but only for 7.3 years more so reduce paid up you're going to have a lesser amount but for the rest of your life extended term insurance you're going to have the same amount of coverage extended but it will be for a limited period