A nonforfeiture benefit is a minimum value or option guaranteed to a life insurance or long-term care policy owner if they stop paying premiums after the policy has built up certain values. Nonforfeiture provisions prevent the policyowner from losing all accumulated benefits, instead providing options such as reduced paid-up insurance, extended term insurance, or a cash surrender value. In long-term care insurance, nonforfeiture benefits may preserve a reduced pool of benefits or provide a paid-up feature after a specified number of years of premium payments. State nonforfeiture laws and model regulations set minimum standards for these values. Nonforfeiture benefits provide a safety net for policyowners whose financial circumstances change, helping ensure that some protection remains even if original premium commitments cannot be maintained.

In practice, advisors discuss nonforfeiture benefits when clients consider discontinuing or reducing coverage. Policy summaries or inforce illustrations show what nonforfeiture options are available, such as taking cash surrender value, electing reduced paid-up benefits, or choosing extended term coverage. For long-term care policies facing premium increases, regulations may require insurers to offer nonforfeiture or contingent benefit options, allowing clients to keep some level of benefits without continuing full premiums. Producers help clients weigh the trade-offs between immediate cash, reduced death benefit, or extended but limited coverage. Understanding nonforfeiture benefits allows advisors to offer more nuanced options than simply surrendering or keeping a policy unchanged, supporting better long-term outcomes during financial stress or changing needs.