Under the NY standard nonforfeiture law (NY Ins. Law § 4221), if an owner of a cash-value life policy stops paying premiums and elects the 'reduced paid-up' nonforfeiture option, what does the insured receive?

Why this is the answer

NY Ins. Law § 4221 requires every cash-value life policy to offer nonforfeiture options when the owner stops paying. The three traditional options are: (1) cash surrender — receive the cash value in lump sum; (2) reduced paid-up — apply the cash value as a single premium to buy a smaller, fully paid-up policy of the same form; (3) extended term insurance — apply the cash value as a single premium to buy term coverage at the original face amount for whatever period the value will purchase. Choice C describes reduced paid-up; choice B describes extended term; choice A is not a nonforfeiture option; choice D is incorrect because nonforfeiture is not a death-benefit accelerator.