Under the paid-up life insurance nonforfeiture option, the policy’s cash value is used to purchase a reduced amount of fully paid-up whole life insurance. Because no further premiums are due, the face amount is less than the original policy, making option C correct.

Term insurance is associated with the extended term option, not paid-up insurance. Riders such as accidental death benefits typically terminate at lapse.

Virginia exam materials emphasize reduced paid-up insurance as a permanent solution that preserves lifetime coverage at a lower death benefit.