Which nonforfeiture option provides the highest amount of insurance protection?

The extended term option provides the highest amount of insurance protection among nonforfeiture options. When a policyholder chooses the extended term option, the cash value of the policy is used to purchase a term insurance policy for the same face amount as the original whole life policy. This means that while the policyholder may not be able to keep the whole life policy active due to non-payment, they can still retain a significant amount of insurance by converting their accumulated cash value into a term policy that offers full coverage for a specified period.

In contrast, the cash surrender option Liquidates the policy's cash value, resulting in no further insurance protection once the policy is surrendered. Reduced paid-up insurance allows the policyholder to maintain a smaller whole life policy, which has a lower death benefit compared to the original policy. The automatic premium loan does not increase insurance protection; it allows the insurer to automatically deduct premium payments from the policy’s cash value, keeping the policy active but not increasing the total amount of coverage.

Therefore, the extended term nonforfeiture option stands out as the one that retains the most significant level of coverage available.