Types of Policies
A 20-year level term policy allows conversion only during the first 10 policy years and renewal only until age 65. In policy year 9 the insured wants permanent coverage without risking later evidence-of-insurability problems. Which advice best protects the contractual right?
Answer and explanation
Answer: A. Level term can have separate renewal and conversion rights with separate deadlines. A policyowner who wants permanent coverage without new evidence should act within the contractual conversion period rather than relying on later renewal.Source: New York Department of Financial Services — Consumer Life Insurance FAQ — Term Life Insurance > level term, renewable term, and convertible term
More types of policies questions
- How does a life annuity with 10-year period certain settlement option protect beneficiaries?
- How does the death benefit of an increasing term rider or policy change over time?
- How does the premium for a joint life (first-to-die) policy compare to buying two separate individual policies of the same face amount?
- How is interest credited to cash values in an interest-sensitive whole life policy?
- How is single-premium whole life ordinarily funded?
- How is the payout phase (annuitization) structured under a straight life income annuity settlement option?
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