The Feature That Allows an Insured to Swap a Term

question 16

Multiple Choice

The feature that allows an insured to swap a term policy in the future for a whole life policy is designated:

• A)Convertible term
• B)Swap term
• C)Flexible swap
• D)Convertible swap
• E)None of the above

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Definitions:

Lockbox System

A service offered by banks to companies for the collection of payments from customers, involving the customers sending their payments to a special post office box.

Net Present Value

A technique utilized in the process of capital budgeting to assess an investment's profitability by determining the difference between the present value of cash inflows and outflows.

Treasury Bills

Short-term government securities with maturation periods of one year or less, considered a safe and liquid investment option.

Opportunity Costs

The cost of missing out on the next best alternative when making a decision.