Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following best describes the benefit of choosing the extended term option as a nonforfeiture option in a life insurance policy?

It allows the policyholder to maintain the original amount of coverage for a limited period without paying additional premiums.

It refunds all premiums paid to the policyholder in cash.

It increases the cash surrender value of the policy.

It provides a reduced amount of paid-up insurance for the remainder of the insured's life.

Previous problemNext problem

Verified step by step guidance

Step 1: Understand the concept of nonforfeiture options in a life insurance policy. Nonforfeiture options are provisions that allow a policyholder to retain some benefits from their policy even if they stop paying premiums.

Step 2: Review the extended term option specifically. This option allows the policyholder to use the cash value of the policy to purchase term insurance for the same coverage amount as the original policy, but for a limited period.

Step 3: Compare the extended term option to other nonforfeiture options. For example, cash surrender refunds the premiums paid, while reduced paid-up insurance provides a smaller amount of coverage for the insured's lifetime.

Step 4: Analyze the benefit of the extended term option. It maintains the original coverage amount temporarily without requiring additional premium payments, which can be advantageous for policyholders seeking short-term coverage.

Step 5: Conclude that the extended term option is best described as allowing the policyholder to maintain the original amount of coverage for a limited period without paying additional premiums.