Extended Term Option

A life-insurance non-forfeiture option under which the insured uses the policy’s cash-value to purchase one-year Term insurance in an amount equal to the original policy face amount. Although the policy holder could select the Extended Term Option at any time, if the policy lapses and no other non-forfeiture option has been selected, the policy will automatically go into Extended Term. Remember, there are three non-forfeiture options: Cash Surrender, Reduced Paid Up and Extended Term.