nonforfeiture provision

A provision of life insurance policy, or of a statute applicable to such a policy, that in the event of the lapse of the policy when it has a reserve value, the insured shall be entitled under options as follows: (1) to receive the cash surrender value; (2) to have the insurance policy continue in force for the full amount for such a period of extended insurance as the reserve, applied on the single-premium basis, will purchase; (3) or to have the policy become a paid-up policy for such amount as the reserve will purchase. 29 Am J Rev ed Ins § 620. The provision in a statute whereby a life insurance company is precluded from issuing a policy which provides for the forfeiture of the same upon failure of the insured to pay a loan on the policy or interest thereon, without reference to the fact, as it may be in a particular case, that the total indebtedness on the policy, principal and interest, is less than the loan value. Keeley v Mutual Life Ins. Co. (CA7 Ill) 113 F2d 633.