Which nonforfeiture option allows for the cash surrender value of a policy to be converted into term insurance for a specified duration?

The nonforfeiture option that allows for the cash surrender value of a policy to be converted into term insurance for a specified duration is known as extended term insurance. This option enables policyholders to use the cash value accumulated in their life insurance policy to purchase a term insurance policy for the same face amount as the original policy but for a limited time, which is determined by the cash value.

Extended term insurance is beneficial for policyholders who choose not to continue paying premiums but still want to maintain some level of life coverage for a certain period. It offers the advantage of not losing the insurance benefit entirely, even if premium payments cease.

In contrast, reduced paid-up insurance is a different option where the cash value of the policy is used to purchase a new whole life policy with a reduced face amount but an indefinite duration. Whole life insurance is a type of insurance itself rather than a nonforfeiture option. Temporary insurance is not a standard term used in nonforfeiture options and generally refers to short-term coverage.