Question

____________if an insured converts his Life policy to Paid-Up Insurance and buys new insurance.

Answer 1

If an insured converts their life insurance policy to paid-up insurance and buys new insurance, they are essentially using the accumulated cash value from the current policy to purchase a smaller, fully paid-up policy. This allows them to continue having coverage without making any more premium payments. They can then choose to purchase additional new insurance if needed.

Step-by-step explanation:

If an insured converts his Life policy to Paid-Up Insurance and buys new insurance, it means that the insured has decided to stop paying premiums on the current policy and instead use the accumulated cash value to purchase a smaller, fully paid-up policy. This allows the insured to continue having coverage without making any more premium payments. The insured can then choose to purchase a new insurance policy in addition to the paid-up policy, if they still require more coverage.