Which nonforfeiture option provides extended term insurance?

• A. extended term option
• B. cash surrender option
• C. nonforfeiture option
• D. reduced paid-up option

Answer: (C)

This is about how nonforfeiture options keep some coverage when premiums stop. The one that provides extended term insurance uses the policy’s cash value to buy a term life policy for the same death benefit as the original policy. The length of that term depends on how much cash value is available, so you get continued protection, just for a limited period. Cash surrender simply pays out the cash value, reduced paid-up uses the cash value to buy a smaller permanent policy, and neither preserves the original face amount for a long term. So the option that yields extended term insurance is the extended term option.