After the extended term life nonforfeiture option is chosen, the available insurance will be?

After the extended term life nonforfeiture option is chosen, the available insurance will be?

• A. Single premium payment for life
• B. Level term for a stated period of time
• C. Whole life for the insured's lifetime
• D. Variable life for a flexible time frame

Answer: (B)

Choosing the extended term life nonforfeiture option means that the policyholder is opting to use the cash value of their whole life insurance policy to purchase a term insurance policy. Under this arrangement, the available coverage is termed and is typically equivalent to the face amount of the original whole life policy, but it is temporary and only lasts for a specified period—referred to as the "stated period of time." This is why the selection of level term insurance for a limited duration is the correct choice. The term policy maintains a level premium and death benefit throughout the term, but importantly, it does not provide lifelong coverage, as would be afforded by a permanent policy like whole life. Hence, it allows the insured to retain some form of life insurance coverage while the cash value is utilized, but only for a defined term rather than a lifetime benefit.

Choosing the extended term life nonforfeiture option means that the policyholder is opting to use the cash value of their whole life insurance policy to purchase a term insurance policy. Under this arrangement, the available coverage is termed and is typically equivalent to the face amount of the original whole life policy, but it is temporary and only lasts for a specified period—referred to as the "stated period of time."

This is why the selection of level term insurance for a limited duration is the correct choice. The term policy maintains a level premium and death benefit throughout the term, but importantly, it does not provide lifelong coverage, as would be afforded by a permanent policy like whole life. Hence, it allows the insured to retain some form of life insurance coverage while the cash value is utilized, but only for a defined term rather than a lifetime benefit.