If You Buy a Term Insurance Policy with a Conversion

question 16

Multiple Choice

If you buy a term insurance policy with a conversion option, this means that you

• A) will get most of your premiums back if you terminate the policy before its expiration.
• B) can convert the policy to a larger term policy after one year.
• C) can convert your term policy to a whole life policy during the conversion period.
• D) will be able to change the term of your policy and automatically extend it.

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Definitions:

Price Appreciation

The increase in the market value of an asset over time, often resulting from economic factors, demand, and market conditions.

Savings Banks

Financial institutions primarily engaged in accepting savings deposits and paying interest to depositors.

Business Lending

The process by which businesses obtain funds through loans or lines of credit from banks or other financial institutions to finance their operations or expansion.

Home Mortgage Lending

The process by which banks and other financial institutions loan money to consumers for the purpose of purchasing homes, using those homes as collateral for the loans.