Which term describes the policyholder’s power to receive full or partial refunds from their policy?

The term that describes the policyholder’s power to receive full or partial refunds from their policy is known as nonforfeiture rights. These rights are an important feature in life insurance policies, ensuring that in the event of policy surrender or certain other conditions, the policyholder is entitled to a cash value or a refund, rather than losing all benefits. Nonforfeiture rights are particularly relevant in whole life and certain types of convertible life insurance policies, where the built-up cash value can be accessed by the policyholder.

The concept provides a safety net for policyholders, ensuring that even if they decide to discontinue payments, they do not lose all accrued benefits immediately. This makes nonforfeiture rights a critical aspect of policyholder protection, reflecting the investment the policyholder has made over time into their life insurance policy.