The Extended Term option is a nonforfeiture option because:

The Extended Term option is a nonforfeiture option because:

• A. Monthly income option.
• B. Surrender option.
• C. Nonforfeiture option.
• D. Extended rider option.

Answer: (C)

Nonforfeiture options protect the policyholder when premium payments stop by preserving some value of a permanent policy. The Extended Term option uses the policy’s cash value to buy term insurance with the same death benefit for as long as the cash value allows. This continues coverage without needing new premiums, which is exactly what a nonforfeiture option aims to do—prevent the policy from lapsing and keep some protection in force. Other choices describe different ways benefits might be paid or the policy surrendered, but they don’t capture how extended term preserves the policy’s death benefit through the cash value.

Nonforfeiture options protect the policyholder when premium payments stop by preserving some value of a permanent policy. The Extended Term option uses the policy’s cash value to buy term insurance with the same death benefit for as long as the cash value allows. This continues coverage without needing new premiums, which is exactly what a nonforfeiture option aims to do—prevent the policy from lapsing and keep some protection in force. Other choices describe different ways benefits might be paid or the policy surrendered, but they don’t capture how extended term preserves the policy’s death benefit through the cash value.