• The opinion that nonforfeiture benefits should be mandated was not completely unanimous among the Task Force.
  • Following is a presentation by Shane Chalke to a group of economists at The Institute For Humane Studies at George Mason University on June 29, which presents the opposing view.

1989-4 NAIC Proc. 593

  • 1998 03 - New Standard Nonforfeiture Law: Unsafe at Any Speed?, by Douglas C. Doll, PRODUCT DEVELOPMENT NEWS, Society of Actuaries - PDF


  • The development of level premium whole life insurance, limited premium policies and policies on the endowment plan maturing in the policyholder's lifetime and, later, short-term endowment contracts on the single premium plan, has resulted in the requirement for the accumulation of substantial reserves.
  • It was recognized early by most life insurance companies that it was unconscionable to confiscate or cause the forfeiture of such reserves in their entirety.
  • On the other hand, for very satisfactory reasons it was not deemed an equitable procedure to compel a company to give the outgoing policyholder, in every case, ·the whole reserve held on the policy.

Term Policies

  • Policies written for a term of less than twenty years. are not now usually required to contain a non-forfeiture benefit.
  • If there is a substantial accumulation on any such policy, there is ho good reason why the insured should be deprived thereof.

1942-Supplement, NAIC Proceedings - Reports and Statements on Non-Forfeiture Benefits and Related Matters


  • The paid-up insurance option might· be described as the allowance upon lapse of a smaller amount of insurance on the whole life or endowment plan, similar to that provided for in the original policy, the amount of insurance being the variable depending upon the length of time premiums were paid, the plan of the original policy and other factors affecting the value of the original policy at lapse.
  • Under the extended insurance option, the amount of insurance is held at the same figure as in the original policy, subject to reduction on account of indebtedness, but the plan is changed to term insurance of such length that the value thereof is approximately equal to the value of the policy.

    1942-Supplement, NAIC Proceedings - Reports and Statements on Non-Forfeiture Benefits and Related Matters

  • Whenever the plan or term of a policy shall have been changed, either by request of the insured or automatically in accordance with a provision of the policy, the date of inception of the changed policy, for the purpose of determining the cash surrender value, shall be the date as of which the rated age of the insured is determined under the changed policy.  (p158) 

1942-Supplement, NAIC Proceedings - Reports and Statements on Non-Forfeiture Benefits and Related Matters

  • A Report to the NAIC Life and Health Actuarial Task Force on a Proposal Paper for a New Approach to Nonforfeiture Law

-- From the American Academy of Actuaries Working Group on Nonforfeiture Law - Committee on Life Insurance

1996-3v2, NAIC Proceedings

  • One of the ideas that people have considered for life insurance is to have life insurance without a cash-surrender value, but a nonforfeiture value, either reduced, paid-up, or extended-term insurance, that would in some way make life insurance and annuity standard nonforfeiture a little bit closer.



RECORD, Volume 22, No. 3*
Orlando Annual Meeting
October 27-30, 1996
Session 8PD
Nonforfeiture Law Developments