A California whole-life policyholder stops paying premiums after 15 years and the policy has substantial cash value. Under the CA standard nonforfeiture law (Ins. Code § 10159.1-10167.5), which option is generally the DEFAULT (automatic) nonforfeiture option if the insured selects none?

Why this is the answer

California's standard nonforfeiture law (Ins. Code § 10159.1-10167.5, implementing the NAIC Standard Nonforfeiture Law for life) requires whole-life and other cash-value policies to offer three nonforfeiture options: (1) Cash surrender — receive the net cash value; (2) Reduced paid-up insurance — a smaller face, no more premiums; (3) Extended term insurance — keep the original face for whatever period the net cash value can buy at the insured's attained age. If the insured fails to elect, the STATUTORY DEFAULT is option (3) — extended term — because it best preserves the death-benefit protection the consumer originally bought. Automatic premium loan (d) is a separate policy feature that only applies if the policy contains the APL rider AND the policyholder previously elected it.