The reduced paid-up nonforfeiture option allows policyholders to convert their policy into a paid-up policy with a reduced face amount without the need to pay additional premiums.
Reduced Paid-Up Nonforfeiture Option: This option allows the policyholder to stop paying premiums and convert the policy into a paid-up policy with a reduced face amount.
Example: If a policyholder decides to trigger the reduced paid-up nonforfeiture option on a [tex]$100,000 policy, the new paid-up policy might have a reduced face amount of $[/tex]50,000.
Outcome: The cash value of the original policy is used to fund the new reduced paid-up policy, and no further premiums are required to be paid.
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