If You Buy a Term Insurance Policy with a Conversion

question 31

Multiple Choice

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

• A)can covert the policy to variable life insurance before it terminates.
• B)can convert the amount of coverage by a set amount at the renewal time.
• C)can convert it to a whole life policy before it terminates.
• D)can convert it to a longer term at the renewal time.

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Definitions:

Consolidated Net Income

The total profit of a corporation and its subsidiaries after taxes, interest, depreciation, and other expenses have been deducted, reflecting the overall earnings of the conglomerate.

Parent

A company that controls or owns more than half of another company's stock, thereby having control over its subsidiary.

Subsidiary

A company controlled by another company, referred to as the parent company, through ownership of more than half of its voting stock.

Impairment

The reduction in the recoverable value of a fixed asset or goodwill below its book value on the balance sheet, often leading to an expense in the income statement.