Pennsylvania Life and Health Insurance Exam Practice Question
Which of the following is true regarding the convertibility option in a term life insurance policy?
Correct Answer: D
Rationale: The convertibility option in a term life insurance policy allows policyholders to switch to a permanent policy without needing to provide proof of insurability. This is beneficial as it ensures coverage even if health changes occur.
Option A is incorrect; premiums typically increase upon conversion due to the shift to a permanent policy. Option B is wrong because the key feature of convertibility is that no evidence of insurability is required. Option C is also inaccurate; conversion can usually occur at any time during the term, not just within the first year. Thus, the ability to convert without proof of insurability is a significant advantage for policyholders.
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