Extended Term Life Insurance

Extended term life insurance is an alternative option when permanent life insurance becomes too expensive. The top companies have an average life insurance rate of $9/mo. However, extended term life insurance quotes are determined by personal factors. Shop around and compare extended term life insurance rates before using the surrender cash value on a life insurance offer.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Jul 28, 2021

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The Rundown

  • Extended term life insurance allows you to keep your coverage if you can’t afford whole life insurance
  • Your accumulated cash value is used to purchase extended term life insurance when you miss too many payments
  • Use your accumulated cash value to pay for future monthly payments

Did you know extended term life insurance is connected to the nonforfeiture clause? When you can’t make your life insurance payments, your life insurance company presents a few options.

One of those options includes an extended term life insurance (ETI) policy. What is ETI coverage on life insurance? Keep reading our guide to learn everything you need to know about extended term life insurance and how it’s linked to permanent life insurance.

After reading about extended term life insurance, enter your ZIP code in the free comparison tool above to find affordable extended term life insurance companies in your area.

How much are extended term life insurance rates?

When you use your surrender cash value to purchase extended term life insurance, you won’t have to worry about your monthly payments anymore. But what is extended term life insurance?

Extended term life insurance is a type of life insurance policy that’s longer than the provider’s standard policy.

You can only receive an extended term life policy if you can’t pay your permanent life insurance payments but have a surrender cash value.

Several factors determine whether affordable extended term life insurance is available to you. Here are some of the most significant factors that affect extended term life insurance quotes:

  • Age
  • Gender
  • Health
  • Policy Term
  • Policy Type
  • Death Benefits (Coverage Limits)

Some of the best insurance companies charge $9 a month for $100,000 death benefits, but that price is usually targeted toward younger and more healthy policyholders.

The older you get, the more you’ll pay for life insurance. However, you can secure cheaper life insurance by shopping around.

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How does an extended term life insurance policy work?

Before you buy extended term life insurance, you’ll have a chance to make a payment to your life insurance bill.

If you can’t pay it, the life insurance company will use your accumulated cash value to purchase an extended term life policy.

Surrender cash value is the money you’ll receive after the extended life insurance company has resolved fees and other charges.

The coverage limit (death benefit) will be the same as your previous permanent life insurance policy. However, you won’t have access to the accumulated cash account.

How does the nonforfeiture clause work?

The nonforfeiture clause says that you, the policyholder, can receive full or partial benefits after the insured has missed a payment. Some nonforfeiture clauses include the return of monthly payments in addition to the surrender cash value.

However, it will cancel your life insurance coverage. If you want to keep your life insurance coverage, you’ll need to purchase an extended term life insurance policy. If you do, that cash value will be applied to your monthly term life insurance premiums.

What is the longest term life insurance policy?

The longest term life insurance policy lasts for about 35 years. If you happen to qualify for an extended term life insurance policy, you may be able to stretch it to a few more years.

What are the advantages and disadvantages of extended term life insurance?

You may not see it right away, but there are some upsides to having extended term life insurance. Let’s explore them in the pros and cons list below.


  • The surrender cash value can pay for upcoming payments
  • You have an opportunity to invest leftover money while keeping life insurance coverage
  • Your monthly payments will be lower


  • You lose access to an accumulated cash account
  • A lapse in life insurance may increase your risk at the life insurance company
  • You may have reduced coverage (you may lose specific riders)

Your situation determines the benefits and drawbacks. If you have government-issued life insurance like FEGLI, you won’t be able to use your policy. FEGLI doesn’t allow you to borrow money or receive money from your life insurance policy.

Extended Term Life Insurance: What’s the bottom line?

The extended term life insurance policy is an alternative when permanent life insurance becomes too expensive, but you may want to consult with a financial advisor before you invest your surrender cash value in life insurance.

Unless you suffer from a long-term illness or have high-risk hobbies, it may be in your best interest to keep your investments and life insurance separate

If you decide you’re ready to buy extended term life insurance, enter your ZIP code below to start comparing free life insurance quotes from local companies in your area.

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