If the Premium on a Term Insurance Policy Is Not

question 102

Multiple Choice

If the premium on a term insurance policy is not paid by the due date, which of the following is true?

• A) The policy is immediately terminated.
• B) The death benefit of the policy is reduced by the amount of the premium owed.
• C) The premium will be deducted from the cash value of the policy.
• D) The policyholder is given a grace period to pay after which the policy will be terminated if the premium is not paid.

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Definitions:

Economies Of Scale

Cost savings that accrue to firms from upscaling their production operations, where there's a typical decrease in the cost per unit with larger production volumes.

Average Cost

The sum of all production expenses divided by the quantity of items made, showing the expense for each unit of product.

Purely Competitive Equilibrium

A market state characterized by a perfect match between supply and demand, resulting in an optimal distribution of resources without any single buyer or seller influencing the price.

Monopoly Equilibrium

The price and output level determined in a market where a single seller controls the entire supply of a good or service.