Which nonforfeiture option is automatically selected by the insurer if the policyowner does not specify one?

The correct answer is that the extended policy is the nonforfeiture option that is automatically selected by the insurer if the policyowner does not specify a choice.

In the context of life insurance, nonforfeiture options are important provisions that protect the policyholder's investment in a policy when they can no longer pay premiums. The extended term option allows the policyholder to utilize the cash value accumulated in the policy to purchase a new term policy for the same face amount as the original policy. This ensures that the insured maintains coverage for a specific period without requiring additional premium payments.

The automatic selection of the extended policy as the nonforfeiture option serves to benefit the policyholder by providing continued life insurance coverage, thus protecting their interests in the event of lapsing due to non-payment. This is particularly significant for policyholders who may be unable to make premium payments due to financial difficulties but still wish to maintain some level of protection for their beneficiaries.