Extended term life insurance is coverage that is provided by the cash value in a life insurance policy. The policy is usually a whole life policy, but can originate from other cash value plans.
Here is an example : You have a $100,000 whole life policy that has built up some cash value. You stop paying premiums and your non-forfeiture option is extended term. The cash value is used to provide you with $100,000 of coverage for a specified term based on the cash value. This is referred to as extended term.
Some insurance companies have extended term as the default non-forfeiture option for cash value plan whole life plans when you miss a premium others have automatic premium loan.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
Extended Term Life Insurance does not start out as Term Life Insurance; it starts as Whole Life. Your Whole Life policy may be changed to Extended Term Life if you can no longer pay the premium for your Whole Life policy. The cash value in your policy is used to buy a Term policy, instead.
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Here is an example : You have a $100,000 whole life policy that has built up some cash value. You stop paying premiums and your non-forfeiture option is extended term. The cash value is used to provide you with $100,000 of coverage for a specified term based on the cash value. This is referred to as extended term.
Some insurance companies have extended term as the default non-forfeiture option for cash value plan whole life plans when you miss a premium others have automatic premium loan.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.