What happens to accumulated cash value in a permanent life insurance policy if premiums are not paid?

In a permanent life insurance policy, the accumulated cash value serves as a savings component that can be accessed under certain circumstances, even if premiums are not paid. When premiums are not paid, the policyholder has the ability to utilize non-forfeiture options. These options allow the policyholder to keep some value from the policy, which may include taking a reduced paid-up insurance policy, using the cash value to cover premiums, or receiving a cash surrender value.

These non-forfeiture options are designed to protect the policyholder's investment in the policy, ensuring that they do not completely lose the accumulated cash value if they are unable to continue paying premiums. This is an important feature of many permanent life insurance policies, as it provides flexibility and access to a portion of the cash value even in times of financial difficulty.

The other options present scenarios that do not accurately reflect how the cash value is managed when premiums are unpaid. Therefore, the correct understanding is that the policyholder may access non-forfeiture options based on cash value.