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When the extended term life nonforfeiture option is selected, the policyholder uses the cash value of their whole life insurance to convert it into a term life insurance policy for a specific duration without needing to provide evidence of insurability. This option allows the insured to maintain life insurance coverage but as a level-term policy, which means the death benefit remains constant for the period specified.

This coverage is temporary and is equal to the face amount of the original whole life policy but is only available for a period determined by the cash value accumulated in the policy. The term of coverage is calculated based on the amount of cash value available at the time of conversion, ensuring that while the lifetime coverage is sacrificed, the insured does not lose all benefits.

The other options do not accurately represent this nonforfeiture choice. There is no cancellation involved for the term; therefore, it does not provide for a specified duration in that manner. The coverage will not be whole life; rather, it shifts to a term structure, which inherently has a time limit. Lastly, this insurance option is not adjusted based on market conditions; instead, it is based solely on the internal values of the policy.