All of the Following Statements About the Conversion of a Term

question 24

Multiple Choice

All of the following statements about the conversion of a term policy are true EXCEPT

• A)Under an attained age conversion,the premium is based on the insured's attained age at the time of conversion.
• B)Under an original age conversion,the policyowner must pay a financial adjustment in addition to the premium for the new policy.
• C)Most insurers require original age conversion to take place within a specified period (5 years,for example)of the issue of the term policy.
• D)Evidence of insurability is required before a conversion is permitted.

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Definitions:

Cost of Production

The total expense incurred in manufacturing a product or providing a service, including raw materials, labor, and overhead costs.

Producer Surplus

The variance between the lowest price producers agree to sell a good or service for and the price they actually get.

Demand Curve

An illustrative chart that maps out the link between a good or service's price and the amount of it people are willing to buy during a certain period.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity supplied.