If You Have a Multiyear Level Term Policy

question 40

Multiple Choice

If you have a multiyear level term policy,

• A) You can convert your policy to a permanent type at the end of the term.
• B) You policy will continue for one year.
• C) Your premium will be the same for the duration of your policy.
• D) Your premium will not increase when you renew it.
• E) None of these is correct.

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Definitions:

Cash Dividends

Payments made by a company out of its earnings to its shareholders, typically in the form of cash, representing a portion of the company's profits.

Retention Ratio

The percentage of net income that is retained in the business rather than paid out as dividends; synonymous with Plowback Ratio.

Cash Dividends

Cash dividends refer to the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Selling and Administrative Expenses

Costs associated with the daily operations of a business that are not directly linked to producing the product or service but are necessary for selling and managing the business.