VPN encryption: Is all data encrypted?

Virtual Private Networks (VPNs) are one of the most commonly cited tools related to modern web privacy. Although VPNs are widely used, more and more providers are advertising VPNs that protect privacy. For example, NordVPN's website advertises, "Enjoy secure and personal access to the Internet with NordVPN, encrypting your online activity to protect your personal information from hackers or prying advertisers."