Which Is TRUE About The Cash Surrender Nonforfeiture Option?

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Which Is TRUE About The Cash Surrender Nonforfeiture Option?

a) Funds exceeding the premium paid are taxable as ordinary income.

b) After the cash surrender, the insured is covered for a grace period of 1 month.

c) The policy remains active for some time after the policyholder opts for cash surrender.

d) The policyholder receives the original cash value of the policy.

Answer: a) Funds exceeding the premium paid are taxable as ordinary income.

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