Extended Term Insurance
What Does Extended Term Insurance Mean?
Extended term insurance is a type of life insurance that allows a policyholder to maintain coverage without the need to pay premiums.
Insuranceopedia Explains Extended Term Insurance
Extended term insurance enables policyholders to stop paying premiums once the cash value of the policy reaches a self-sustaining level. If the investment component of the insurance policy is adequate to cover the payments, the policyholder can convert their whole life insurance policy into a term life policy, with the premium funded through the cash accumulation of the whole life policy. This conversion is one of the reasons the choice between term and permanent life insurance matters, since only permanent policies build the cash value needed for this option. For more on how different policies accumulate that cash value in the first place, see which type of life insurance generates immediate cash value.
