Which Nonforfeiture Option provides continuation of protection after lapse by converting cash value to term insurance with the same face amount?

• A. Cash surrender value
• B. Reduced paid-up
• C. Paid-up additions
• D. Extended Term

Answer: (D)

Nonforfeiture options let a policyholder keep some coverage if the policy lapses. Extended term uses the cash value to buy term insurance that provides the same face amount as the original policy. The protection continues, but only for a limited period—the term length is determined by the amount of cash value and the insured’s age. After that term ends, coverage typically ends unless other options are chosen. The other options don’t preserve the same face amount as term insurance: cash surrender value ends protection, reduced paid-up lowers the face amount to a paid-up policy, and paid-up additions add more paid-up policy units rather than converting to term coverage with the same face amount.