Nonforfeiture Options: Nonforfeiture options provide policyholders with alternatives if they decide to stop paying premiums. These options protect the policyholder from losing the cash value of their policy.
Extended Term Insurance: Under the extended term insurance option, the policy's cash value is used to purchase a term insurance policy with the same face amount as the original policy. The length of the term is determined by the amount of the cash surrender value.
Full Face Amount: This option ensures that the insured maintains the same death benefit amount, though the coverage period is limited by the cash value available.
Regulatory References: The details of nonforfeiture options, including extended term insurance, are governed by the California Insurance Code Section 10161.