CMFAS M9 Life Insurance Products & Riders question: extended term insurance non-forfeiture

CMFAS M9Life Insurance Products & Riders

Under the extended term insurance non-forfeiture option on a Whole Life policy, when premiums are defaulted and the owner does not choose another option, the policy:

A Continues as reduced paid-up Whole Life cover, at a lower sum assured, for the insured's lifetime
B Continues as paid-up term cover for the original face value, for the term the net cash value buys
C Pays the cash value out as a lump sum and all cover ends
D Keeps the full Whole Life cover in force for life, with all future premiums waived by the insurer

Show the answer and explanation

Answer: B. Continues as paid-up term cover for the original face value, for the term the net cash value buys

Extended term insurance provides paid-up term cover equal to the original face value (adjusted for bonus additions and indebtedness); the length of the term is whatever the net cash value can buy at the attained age. If no option is elected within the specified period after default, this option automatically takes effect.

Common mistake

Keeping the original amount but for a limited term is extended term; keeping cover for life at a reduced amount is reduced paid-up.

Practise more M9 Life Insurance Products & Riders questions

Exam-style questions with worked answers, then full timed mocks. Free to start.

Start practising →

Study note: Life Insurance Products & Riders CMFAS M9practice questions & mock exams

Related CMFAS M9 questions

The survival period (usually 30 days from the occurrence of a covered critical illness) applies to which type of Critical Illness Rider?Mr Rao's children are now self-supporting, so his large protection need has ended. He wants to stop paying premiums on his Whole Life policy but would like to keep a smaller amount of cover in force for the whole of his life to leave a modest legacy. Which non-forfeiture option should he elect?Under which legal provision must a life insurer keep separate statutory insurance funds, with a separate fund maintained specifically for investment-linked policies?

Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.

Start practising →

Original study material mapped to the public CMFAS M9 syllabus. Unofficial, not endorsed by MAS or SCI. Verify figures and rules against current guidance before relying on them.