If You Have a Conversion Term Policy

question 91

Multiple Choice

If you have a conversion term policy,

• A) Your premium will not increase when you renew it.
• B) You can convert your policy from permanent to term at any time.
• C) You can convert your term policy to a permanent policy.
• D) Your policy will have the same premium as other term policies.
• E) Your premium will be higher than a whole life policy premium.

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Definitions:

Straight-line Method

A method of allocating an asset's cost evenly over its useful life for the purposes of calculating depreciation.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation for tax purposes that allows faster depreciation in the initial years of an asset's life.

Equipment

Tangible assets used in operations, such as machinery or computers, that have a useful life beyond one accounting period.

MACRS

Modified Accelerated Cost Recovery System, a method of depreciation in the United States that allows businesses to recover investments in certain property through tax deductions over a specified life.