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:

Taxes

Compulsory financial charges or levies imposed on individuals or entities by a governmental organization in order to fund public expenditures.

Accounts Payable

Obligations of a company to pay off short-term debts to its suppliers or creditors.

Net Working Capital

This is the difference between a company's current assets and its current liabilities, indicating its short-term financial health and ability to cover short-term obligations.

EBIT

Earnings Before Interest and Taxes, an indicator of company profit excluding costs from interest and income tax.