Question

Larry, age 52 wishes to convert his level term policy to a whole life policy. He has owned the term policy for 10 years. His agent informs him that the insurance company could use age 42 to determine the future whole life premiums. What term describes this convertibility option?

Answer 1

The convertibility option that allows Larry, age 52, to convert his level term policy to a whole life policy using age 42 to determine future whole life premiums is known as the Convertible Term Policy.

Step-by-step explanation:

The convertibility option that allows Larry, age 52, to convert his level term policy to a whole life policy using age 42 to determine future whole life premiums is known as the Convertible Term Policy.

This option allows policyholders to switch from a term life insurance policy to a permanent whole life insurance policy, typically without the need for a medical examination or additional underwriting. By using age 42 to determine the premiums, Larry can potentially secure lower premiums compared to the premiums he would have paid at his current age of 52.