Types of Policies
A term insured becomes uninsurable but wants permanent cash-value coverage during the policy’s conversion period. Which feature can meet that objective?
Answer and explanation
Answer: B. Convertible term permits conversion to permanent cash-value insurance under the contract’s terms without new evidence of insurability. A decreasing schedule changes the benefit, renewal does not create an annuity, and return-of-premium coverage does not refund premiums after a death benefit is paid.Source: NAIC — Life Insurance — Term Life Insurance > Convertible term insurance
More types of policies questions
- What primary guarantee is provided to the owner of a fixed annuity contract during the accumulation phase?
- What primary need is decreasing term life insurance specifically designed to cover?
- What surrender charge feature is common in fixed annuity contracts during early policy years?
- What type of annuity is purchased with a single lump-sum payment and defers payouts until a specified future date?
- What type of annuity permits the owner to make periodic premium contributions of varying amounts over time before payouts begin?
- What unbundled components characterize a universal life insurance contract?
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