What happens to a policyholder's coverage amount when they choose Extended Term Insurance?

When a policyholder chooses Extended Term Insurance, the amount of coverage typically remains the same as the original face value of the policy. This option allows the policyholder to convert their cash value from a whole life or universal life insurance policy into a term insurance policy for a specified period. During this time, the coverage continues at the same amount as the original policy, ensuring that beneficiaries remain protected.

Extended Term Insurance does not increase the death benefit; it merely extends the duration for which the existing coverage is valid using the policy's accumulated cash value. The value is not frozen in the sense that the policy is still active and providing coverage during the selected term; rather, it utilizes the cash value to maintain the same coverage equivalent to the original policy for a limited time before the coverage would end if the policyholder does not reinstate or convert it into another form of insurance.