Question

Which of the following is NOT one of the basic types of coverages that are available, based on how the face amount changes during the policy term?

1) Decreasing term life insurance
2) Level term life insurance
3) Increasing term life insurance
4) Convertible term life insurance

Answer 1

Convertible term life insurance is not based on the change in face amount during the policy term but rather refers to the ability to convert the policy to a whole life insurance policy without a medical exam.

Step-by-step explanation:

The type of coverage that is NOT one of the basic types of coverages based on how the face amount changes during the policy term is convertible term life insurance. The basic types include:

• Decreasing term life insurance: The face amount decreases over the policy's term.
• Level term life insurance: The face amount stays the same throughout the policy's term.
• Increasing term life insurance: The face amount increases over the policy's term.

Convertible term life insurance, however, refers to a policy that can be converted into whole life insurance without a medical exam, not to changes in the face amount.