In an extended term insurance nonforfeiture option, where does the premium to purchase coverage come from?

In an extended term insurance nonforfeiture option, the premium used to purchase the insurance coverage is derived from the policy's cash value. This option is designed to ensure that if a policyholder decides to stop paying premiums, their accumulated cash value can be utilized to provide a limited period of term insurance coverage.

The cash value of the policy has been built up over time through premium payments, and when the extended term option is selected, this accumulated cash value is applied to purchase a new term policy for a specified period. This allows the policyholder to maintain some level of life insurance protection without the need to continue paying premiums out of pocket.

This option is particularly beneficial for policyholders who may find themselves in a situation where they can no longer afford the premiums but still want to retain some insurance coverage for their beneficiaries.