If Louise allows her whole life policy to lapse, which nonforfeiture option provides the most life insurance protection?

The extended term option offers the most life insurance protection when a whole life policy lapses. This option essentially takes the cash value of the lapsed policy and converts it into a term life insurance policy for a specified period, allowing the insured to maintain coverage for a certain duration without requiring premium payments.

This is particularly advantageous for the policyholder who still desires life insurance coverage but cannot continue paying premiums on the original whole life policy. The key aspect of the extended term option is that it provides the benefit amount equal to the original policy, thus maximizing the life insurance protection available, albeit for a limited term.

In contrast, the cash surrender value option would result in the loss of any life insurance coverage once the policy is surrendered for cash, while the reduced paid-up option also decreases the death benefit significantly in exchange for a paid-up policy with lower coverage. The life income option, instead of providing coverage, would give payouts based on the accumulated cash value, and thus would not offer any life insurance coverage in the traditional sense.