Which term refers to a nonforfeiture option allowing the policyowner to receive the policy's cash value?

The term that refers to a nonforfeiture option allowing the policyowner to receive the policy's cash value is Cash Surrender Value. When a policyowner decides to surrender their life insurance policy, they can obtain the cash value accumulated over the life of the policy. This cash value is essentially the savings component of the permanent life insurance policy, which policyowners can access if they choose to terminate the policy.

Cash Surrender Value is significant because it provides the policyholder with immediate financial resources without the need to keep the policy in force. This option is particularly important in circumstances where the policyholder may no longer need the life insurance coverage or is looking for liquidity.

The other options involve different aspects of policy handling. The Extended Term Option allows policyholders to convert their policy into term insurance for a specified period, ensuring coverage without additional premiums. Reduced Paid-Up Insurance is an option that allows the policy to remain in force for a reduced amount of coverage without requiring further premium payments. A Policy Loan refers to borrowing against the cash value of the policy while keeping it active, rather than surrendering it fully. Each of these options serves different needs but does not pertain specifically to cash values being surrendered directly.