Question

When the extended term option is used, the face amount is:

Select one:
a. Equal to the original coverage
b. Lower than the original coverage
c. Higher than the original coverage
d. The amount the cash value can purchase for the extended policy term

Answer 1

The face amount is equal to the original coverage when the extended term option is used in whole life insurance.

Step-by-step explanation:

When the extended term option is used in whole life insurance, the face amount is equal to the original coverage.

The extended term option allows the policyholder to continue the coverage for a specified period of time without making any further premium payments. The face amount of the extended term policy remains the same as the original coverage amount, providing the same death benefit to the insured's beneficiaries in case of the insured's death during the extended term.

This option is often used when the policyholder no longer wants to pay premiums but still wants to maintain some level of coverage.