Which of the Following Statements Regarding Convertible Term Insurance Is

question 25

Multiple Choice

Which of the following statements regarding convertible term insurance is true?

• A)Evidence of insurability must be provided to convert the policy.
• B)More term policies are converted using the original-age method than using the attained-age method.
• C)The converted coverage has a lower face amount than the term coverage.
• D)The annual premium for the cash value coverage is lower if an original-age conversion is used than if an attained-age conversion is used.

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Definitions:

Comparative Advantage

The ability of an individual, company, or country to produce a particular good or service at a lower opportunity cost than competitors, leading to more efficient international trade.

Comparative Advantage

A principle in international trade that suggests a country should export goods in which it is more efficient and import those in which it is less efficient, compared to other countries.

Opportunity Cost

The act of selecting one alternative leads to the loss of possible gains that could have been obtained from other options.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than others, leading to more efficient trade possibilities.