A whole life policy option where extended term insurance is selected is called a(n)

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Prepare for the Pennsylvania Life Insurance Exam. Use flashcards and multiple-choice questions, each with hints and explanations. Get ready for your certification!

Multiple Choice

A whole life policy option where extended term insurance is selected is called a(n)

Explanation:
Nonforfeiture options are features that let a policyowner keep some value from a lapsed or nonpaid policy. Among these, extended term insurance uses the policy’s cash value to purchase term coverage that continues the original death benefit for as long as that cash value will support it. So when extended term insurance is selected, you’re exercising a nonforfeiture option—the broader category—rather than describing the form itself. The other choices describe different nonforfeiture outcomes (cash surrender, reduced paid-up) or specific forms, but the question asks for the overall category that includes the extended term method.

Nonforfeiture options are features that let a policyowner keep some value from a lapsed or nonpaid policy. Among these, extended term insurance uses the policy’s cash value to purchase term coverage that continues the original death benefit for as long as that cash value will support it. So when extended term insurance is selected, you’re exercising a nonforfeiture option—the broader category—rather than describing the form itself. The other choices describe different nonforfeiture outcomes (cash surrender, reduced paid-up) or specific forms, but the question asks for the overall category that includes the extended term method.

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