Which option provides policy coverage for the longest duration when a policyholder ceases premium payments?

The option that provides policy coverage for the longest duration when a policyholder ceases premium payments is the reduced paid-up option.

When a policyholder stops making premium payments, opting for the reduced paid-up insurance allows them to convert their whole life policy into a paid-up policy with a lower face amount. This means that the policyholder does not have to pay any further premiums, yet they retain a death benefit that is still in force. The coverage continues for a significant period because it is based on the accumulated cash value of the policy, which is applied toward a new policy's death benefit without future premium obligations.

This is in contrast to the extended term option, which allows policyholders to convert their policy to term insurance for a specific duration based on the policy's cash value. While this option does provide temporary coverage as well, it is typically for a shorter period than the coverage obtainable through the reduced paid-up option.

Cash surrender refers to the policyholder cashing out their policy, effectively terminating coverage altogether. Therefore, this does not provide any ongoing policy coverage. Term conversion allows for the switching of a term policy to a permanent policy, but this would not apply after premium payments cease for permanent insurance, as it relates specifically to term life products.