Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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If a level term is issued as renewable and convertible, what happens to the policy at the end of the term?
  1. The policy is complete and nothing more can be done
  2. The policy is automatically renewed and converted to permanent
  3. The policy is automatically renewed and the premiums decrease
  4. The policy is renewed with increased premiums
Explanation
Answer: D - If a level term is issued as renewable and convertible, the policy can be renewed with increased premiums. The increase in premiums is due to the age of the insured at the time of renewal. While the face amount of the policy is the same, the premium increases.
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