What does extended term nonforfeiture option do?

• A. Uses cash surrender value to buy term with same face amount
• B. Converts to paid-up whole life policy
• C. Pays cash surrender value to insured
• D. Maintains original policy without change

Answer: (A)

Extended term nonforfeiture uses the policy’s cash surrender value to purchase term life insurance for the same face amount. The death benefit stays level at the original amount, but only for the term length funded by the cash value, and typically no ongoing premiums are needed on the original policy. When that term ends, coverage ends unless a new policy is issued. This differs from converting to a paid-up whole life policy, which provides permanent coverage, from paying out the surrender value to the insured, or from keeping the original policy unchanged.