I don't know if thats a good idea. If someone has paid for advertising for 1 week, then the advertising they do shouldn't be removed from the forums as they paid for that advert and it was made on that day.
Paul, I think you missed something important.. "Banned for life"
As I am sure that would be more trouble for the Mod's, so obviously it would not make much sence unless it was for permanent bans. If a member gets banned for something else, then let the ads continue until their term/payment runs out.
This way it gives the advertisers an incentive to advertise more regulary.
Regarding advertising on the web, it doesn't work like print advertising. You pay for traffic at a certain point in time, once your ad time is done, your normally no longer viewable, so unless stated, you can't think your ad will be permanent.