Extended term insurance is a nonforfeiture option in whole life policies that uses the policy's cash value to purchase term insurance for the original face amount for a limited period. If premiums stop, the policy does not immediately lapse; instead, coverage continues as term until the cash value is exhausted. This option preserves the death benefit temporarily but ends cash value growth. It is useful during short-term cash constraints while clients consider reinstatement or alternative funding.

When premiums stop on a whole life policy, advisors may recommend electing extended term to preserve the death benefit temporarily during cash-flow stress. They explain the tradeoff-no new cash value growth-and propose a plan to reinstate or replace coverage before term duration expires. Timely action prevents unintentional lapse.