Which of the following is a potential outcome of the replacement of an insurance policy?

The choice regarding the modification of benefits as a potential outcome of the replacement of an insurance policy is correct because when a new policy is acquired to replace an existing one, the terms and benefits can differ significantly. Modifications might include changes to coverage limits, types of coverage, or exclusions that can either enhance or reduce the benefits compared to the previous policy. This means that depending on the specifics of the new policy, the insured may find that certain benefits are altered—some may be strengthened while others may be less comprehensive.

When considering the other options, an increase in cash value may not always occur with a replacement policy; in fact, it could decrease depending on the structures of the policies involved. Extended premium payments are not a guaranteed outcome, as premium structures can vary widely based on the type of coverage chosen and the underwriting process. Similarly, while some policies may offer longer coverage periods, that is not a certainty and depends on the terms of the new policy. Thus, the nature of the replacement process itself aligns most closely with a modification of benefits, making this option the most relevant.