Which of the following is NOT considered a Nonforfeiture Option?

A nonforfeiture option refers to benefits that a policyholder is entitled to if they decide to stop paying premiums on a whole life insurance policy. These options ensure that the policyholder does not lose all benefits due to non-payment.

The correct answer, the automatic premium loan option, is not categorized as a nonforfeiture option. Instead, it is a provision that allows the insurance company to automatically use the cash value in the policy to pay any overdue premiums. This helps keep the policy in force by preventing it from lapsing due to missed premium payments.

In contrast, reduced paid-up insurance, cash surrender value, and extended term insurance are all recognized nonforfeiture options. Reduced paid-up insurance allows the policyholder to convert their existing policy into a smaller, fully paid-up policy with a reduced face amount. The cash surrender value is the amount the policyholder can receive if they choose to terminate the policy, and extended term insurance allows the policyholder to use the policy's cash value to purchase term insurance coverage for the same face amount for a specified period. These options provide some level of benefit or value to the policyholder even if they stop making premium payments.