What kind of clause allows policyholders to receive benefits even after they have stopped paying premiums?

The nonforfeiture clause is essential in life insurance policies as it protects policyholders by ensuring they receive some benefits even if they cease paying premiums. This clause guarantees that the cash value accumulated in the policy can be utilized in several ways, such as taking it as a cash surrender value, applying it toward the premium of a reduced paid-up policy, or using it to purchase extended term insurance.

This provision is crucial because it provides a safety net for the policyholder, allowing them to retain value from their investment in insurance even if they encounter financial hardships that prevent them from continuing premium payments. By incorporating a nonforfeiture clause, insurers recognize the policyholder's rights and the financial investment they've made, ensuring that the policy has worth beyond the active premium payments.

Other options either do not pertain to the retention of benefits post-premium payment or focus on different aspects of policy renewals or premium payments, hence, they do not confer the same level of protection or benefit to the policyholder in the context of stopped premium payments.