Life Policy ProvisionsQuestion 565 of 716
Under the extended term nonforfeiture option, the policy's cash value is used to:
a.Purchase a smaller amount of paid-up permanent coverage
b.Continue the same face amount as term insurance for as long as the cash value will pay for it
c.Increase the death benefit above the original face amount
d.Provide the policyowner a lump-sum cash refund equal to the full face amount of the surrendered permanent policy
Explanation
Extended term uses the cash value as a single premium to keep the same face amount in force as term insurance for a limited time. Buying a smaller paid-up amount is the reduced paid-up option, and a lump sum is cash surrender.
This topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 716 questions free — no signup required.
Own the complete California Life & Health Insurance Producer Exam guide — PDF + EPUB, $19.99 →
Related questions on this topic
- An accelerated (living) death benefit rider allows the insured to receive part of the death benefit while still alive if the insured:
- A long-term care rider attached to a life insurance policy generally:
- A cost-of-living (COLA) rider on a life policy increases the:
- The reduced paid-up nonforfeiture option provides:
- The automatic premium loan provision prevents a policy from lapsing by:
- When a policyowner requests a cash-value loan, the insurer:
Last reviewed: · editorial process
PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)